Nine states have filed a lawsuit against the Securities and Exchange Commission (SEC) this week due to a regulation mandating public companies to disclose specific climate-related details to potential investors.
The state of Iowa is leading the legal action, following a previous lawsuit from 10 states. The SEC was sued separately by 10 states last week. Last week, another 10 states filed a lawsuit against the SEC over this regulation.
This particular regulation necessitates that publicly traded companies reveal the potential risks of climate change to their business and disclose their carbon dioxide emissions for some larger and medium-sized companies. Opponents argue that the regulation places unnecessary burdens on businesses and compels them to disclose sensitive information.
Critics contend that the regulation places undue burdens on businesses and forces them to disclose confidential information.
Iowa Attorney General Brenna Bird (R) voiced concerns about the regulation, stating that it will impose costly red tape on businesses and negatively impact the supply chain and family farms in Iowa.
Arkansas, Idaho, Missouri, Montana, Nebraska, North Dakota, South Dakota, and Utah, as well as the American Free Enterprise Chamber of Commerce joined Iowa in the lawsuit.
The states involved in the previous lawsuit are West Virginia, Georgia, Alabama, Alaska, Indiana, New Hampshire, Oklahoma, South Carolina, Wyoming, and Virginia.
On the other hand, environmental advocates have threatened their own legal action against the regulation, arguing that it is not comprehensive enough, particularly after it removed proposed requirements for some companies to report emissions resulting from the use of their products, such as an oil company reporting the emissions from burning its fuel to power cars.
In response to the new lawsuits, a spokesperson for the SEC stated that the commission follows its legal authority and will vigorously defend the final climate risk disclosure rules in court.
