While we talking about the SEC’s climate disclosure rule … Before the rule was issued, we were aware that it would be challenged in court. Sure enough, lawsuits rolled in after the publication of the final rule, ultimately setting up a battle in the Eighth Circuit Court of Appeals. The SEC then chose to voluntarily stay the rule pending the final outcome of the litigation. Now the question everyone is asking is: will the SEC’s Climate Disclosure Rule survive? ESG Today reports on a recent Bloomberg poll on the pulse of various attorneys – and the responses do not inspire confidence:
“According to the new Bloomberg survey, only a very small portion of respondents said that they expect the rule to remain wholly intact following the legal challenges, with more than half anticipating that it will survive only in part, and more than 29% of law firm and 25% of in-house respondents saying it will likely be wholly overturned. By practice area, securities and capital markets and ESG-focused attorneys were the most likely to expect the rules to only partially remain intact, at over 70%, with labor and employment and litigation attorneys the least likely to expect the rule to partially survive at 49% and 53%, respectively, the survey found.”
Survey results obviously don’t impact litigation outcomes in any way. To quote The Dude from The Big Lebowski “Yeah well ya know, that’s just like – your opinion man.” He has a point – the survey is only a collection of opinions about the rule’s future. With the vast majority of attorneys expecting the rule to either be struck down in part or struck down entirely, companies may not feel much pressure to comply with the rule as written, leaving compliance with the final rule on the back burner of most legal departments. Although the SEC rule is in limbo, it’s important not to take your eye off the ESG ball. Regulatory mandates are emerging from California to the EU and other regulatory schemes will require compliance sooner rather than later. You are better off being well prepared, especially if the litigation doesn’t result in changes to the rule’s compliance dates.
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