The SEC's climate disclosure rule, issued in early March 2024, faces multiple lawsuits and legal challenges, plus a court ruling that will temporarily halt the SEC climate rule.
Here's a timeline tracking the SEC climate disclosure guidance, associated legal cases and court rulings. Check back regularly for updates.
March 18, 2024: A U.S. appeals court has temporarily halted new rules issued by the Securities and Exchange Commission requiring public companies to disclose climate-related risks.
March 14, 2024: The U.S. Chamber of Commerce filed a lawsuit seeking to halt implementation of the SEC rules.Â
March 11, 2024: Oil and gas industry groups filed a lawsuit to stop SEC’s climate reporting regulations. The suit was filed by the Texas Alliance of Energy Producers and the Domestic Energy Producers Alliance.
March 6, 2024: Liberty Energy and Nomad Proppant Services filed a lawsuit challenging the SEC climate rule.
March 6, 2024: The SEC announced a rule to "enhance and standardize climate-related disclosures for investors."
SEC Rules for Climate-related Disclosures: Purpose, Potential Benefits and Critics' Concerns
The Securities and Exchange Commission adopted certain rules to "enhance and standardize climate-related disclosures by public companies and in public offerings."
Proponents say the rules will allow investors and customers to more effectively understand climate-related risks and associated mitigation steps (if any) that businesses are taking. Still, some of those proponents lament that the SEC rules only cover Scope 1 and Scope 2 reporting, and don't demand supply chain (aka Scope 3) reporting.
Critics, meanwhile, allege that the SEC rules will trigger more bureaucracy, costs and micromanagement about how companies make key determinations about materiality, The Wall Street Journal reported.
SEC Climate-Related Disclosure Rule: Business Impact
Even if the U.S. court system temporarily or permanently blocks the SEC's climate-related disclosure rule, thousands of businesses nationwide need to improve their climate-related tracking and reporting.
Among the reasons: A European Union regulation known as CSRD (Corporate Sustainability Reporting Directive) will eventually impact thousands of U.S.-based businesses that interact with companies in Europe. Moreover, pending California regulations -- such as SB 253 -- may impact thousands of businesses nationwide that interact with companies based in California.
