The U.S. Securities and Exchange Commission (SEC) announced on Thursday that it will delay enforcing its final rule that mandates companies to reveal their climate-related risks until the legal challenge from GOP-led states is resolved.
The SEC stated in its decision that the postponement does not mean the rule is being abandoned, and it will persist in defending the rule against the court challenge from Republican attorneys general.
“The Commission has chosen to temporarily suspend the Final Rules until the judicial review of the combined Eighth Circuit petitions is completed,” the agency stated in its order. “[The] Commission will keep vigorously defending the Final Rules’ legitimacy in court and is looking forward to a prompt resolution of the litigation.”
The rule, which was finalized by the SEC in March, mandates companies to disclose any risks related to climate change that may affect their business, and in some cases, larger and midsized companies are required to provide details about their carbon dioxide emissions. Nine Republican attorneys general, spearheaded by Brenna Bird of Iowa, have filed a lawsuit in the 8th Circuit, arguing that the rule goes beyond the authority of the agency. This lawsuit is one of three against the rule, with 25 Republican state attorneys general involved in legal action.
Meanwhile, a group of 18 Democratic attorneys general has submitted a motion to intervene in defense of the rule in the 8th Circuit case, stating that “investors need trustworthy, comparable information about risks that registered companies face and how they are handling those risks.”
In a separate development, a three-judge panel of the 5th U.S. Circuit Court of Appeals in mid-March ruled in favor of fracking companies that had sued over the rule.
In court, the SEC argued that the rule would not cause irreparable harm to the plaintiffs, pointing out that one of them, Liberty Energy, already discloses this information.
The Hill has contacted Bird’s office for a comment.
