US SEC stays climate disclosure rules pending judicial review closure

After adoption, the rules were challenged in six federal appellate courts. The petitions were consolidated for review in the Eighth Circuit.

“In issuing a stay, the Commission is not departing from its view that the Final Rules are consistent with applicable law and within the Commission’s long-standing authority to require the disclosure of information important to investors in making investment and voting decisions. Thus, the Commission will continue vigorously defending the Final Rules’ validity in court and looks forward to expeditious resolution of the litigation,” the stay order said.

“Among other things, given the procedural complexities accompanying the consolidation and litigation of the large number of petitions for review of the Final Rules, a Commission stay will facilitate the orderly judicial resolution of those challenges and allow the court of appeals to focus on deciding the merits,” it said.

SEC had on March 6 this year adopted rules to enhance and standardise climate-related disclosures by public companies and in public offerings.

The Final Rules reflect the Commission’s efforts to respond to investors’ demand for more consistent, comparable and reliable information about the financial effects of climate-related risks on a registrant’s operations and how it manages those risks while balancing concerns about mitigating the associated costs of the rules, an SEC release said.

The Final Rules required a registrant to disclose climate-related risks that have had or are reasonably likely to have a material impact on the registrant’s business strategy, results of operations or financial condition.

If, as part of its strategy, a registrant undertakes activities to mitigate or adapt to a material climate-related risk, a quantitative and qualitative description of material expenditures incurred and material impacts on financial estimates and assumptions that directly result from such mitigation or adaptation activities needed to be disclosed.

Any oversight by the board of directors of climate-related risks and any role by management in assessing and managing the registrant’s material climate-related risks needed to be disclosed.

Information about a registrant’s climate-related targets or goals, if any, that have materially affected or are reasonably likely to materially affect the registrant’s business, results of operations, or financial condition needed to be disclosed as well.

Such disclosures would include material expenditures and material impacts on financial estimates and assumptions as a direct result of the target or goal or actions taken to make progress toward meeting such target or goal. 

Fibre2Fashion News Desk (DS)