The new climate disclosure rules that were announced in March to enhance and standardise public companies’ climate-related disclosures in public listings, have taken a back seat while the SEC awaits a resolution on the petitions filed in court by opposing parties and organisations.
The SEC said in a statement: “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.
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“Thus, the commission will continue vigorously defending the final rules’ validity in court and looks forward to expeditious resolution of the litigation.”
SEC added that “a stay avoids potential regulatory uncertainty if
registrants were to become subject to the final rules’ requirements during the pendency of the challenges to their validity”.
The SEC also noted that it has previously stayed its rules pending judicial review in similar circumstances.
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When the new rules were announced in March the SEC explained they reflected its efforts to respond to investors’ demands for more consistent, comparable, and reliable information about the financial effects of climate-related risks on operations.
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By GlobalDataHowever, SEC commissioner Caroline A. Crenshaw admitted a major flaw was the omission of Scope 3 emissions and stated it was not the rules she would have written.
Crenshaw said at the time: “While these are important steps forward, they are the bare minimum. Ultimately today’s rule is better for investors than no rule at all, and that is why it has my vote.
“But, while it has my vote, it does not have my unencumbered support. And, although I am loath to leave for future Commissions those obligations that I see as our responsibilities today, I’m afraid that is precisely what we are doing.”
In June 2022 the American Apparel & Footwear Association (AAFA) urged the US SEC to push back certain elements of its proposal requiring climate-related company disclosures.
The AAFA said at the time that its members supported actions to measure and report emissions but wanted to delay the disclosure of Scope 3 emissions and targets until reporting of Scopes 1 and 2 greenhouse gas emissions were more widespread to level the playing field.
