Acting SEC Chair Mark Uyeda yesterday released a statement about action he is taking on the Climate Disclosure Rule, which was stayed pending the outcome of litigation in the Eighth Circuit:
“The Commission’s briefs previously submitted in the cases consolidated in the Eighth Circuit do not reflect my views. The briefs defend the Commission’s adoption of the Rule, but I continue to question the statutory authority of the Commission to adopt the Rule, the need for the Rule, and the evaluation of costs and benefits. I also question whether the agency followed the proper procedures under the Administrative Procedure Act to adopt the Rule.
The lack of statutory authority is a weighty factor. Commissioners have a constitutional obligation to determine the bounds of the agency’s statutory authority, and my views on the Commission’s authority here were the result of lengthy study and research informed by many comments on all sides of the issue.
These views, the recent change in the composition of the Commission, and the recent Presidential Memorandum regarding a Regulatory Freeze, bear on the conduct of this litigation. I believe that the Court and the parties should be notified of these changes…
I have directed the Commission staff to notify the Court of the changed circumstances and request that the Court not schedule the case for argument to provide time for the Commission to deliberate and determine the appropriate next steps in these cases. The Commission will promptly notify the Court of its determination about its positions in the litigation.”
In response, Commissioner Caroline Crenshaw issued her own statement, which concluded:
“I agree wholeheartedly with the acting Chairman that agencies and those who lead them must act within the boundaries of constitutional and statutory authority. Nonetheless, I dispute with equal vigor the notion that the agency acted outside of its remit. It did not. The only things that have changed since the Rule was passed have been matters of politics and not substance. As such, I disagree with the position unilaterally taken today by the acting Chairman.”
Anyone surprised?
But does this mean companies can turn their attentions away from determining and disclosing GHG emissions? Only in terms of filing the specified climate information with SEC. Issuers must still disclose:
- climate-related Item 1A Risk Factors,
- where climate matters intersect with financial accounting standards (see this),
- climate-related executive compensation metrics, goals and targets,
- emissions where required by contract terms and/or debt covenants, and
- pursuant to state and non-US laws/regulations.
Companies continue to be free to make judgments about disclosing relevant data, targets, goals and plans to investors and organizations like CDP and ESG ratings firms.
Our members can learn more about climate disclosure here.
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