Last month, I wrote about the SEC’s plans to rescind its pending climate-related disclosure rules. Now those plans are officially moving forward. Last week, the SEC put forward its proposal to rescind the rules. Current SEC leadership posits that the agency never had the authority to promulgate the rules in the first place. However, the SEC also gives several other rationales for rescinding the rules, stating in a press release:
- “They are unnecessary and inconsistent with a registrant-specific, materiality-based approach to disclosure that best serves the interests of registrants and investors.
- They stray well beyond the policy concerns of the federal securities laws.
- They impose substantial costs on public companies and their shareholders that are not justified by the informational benefits they may provide to some investors.
- They are at odds with the Commission’s policy objectives of facilitating capital formation and promoting public company status.”
The rescission proposal is now open for a 60-day comment period. Barring intervention from the courts, the rule will be officially repealed after this point. This will also likely end the ongoing litigation surrounding the constitutionality of the rule. By not seeking an opinion from the Supreme Court, the SEC may leave the door open for future SEC leadership to reintroduce climate reporting requirements.
Our members can learn more about climate-related disclosures here.
If you’re not already a member, sign up now and take advantage of our no-risk “100-Day Promise” – during the first 100 days as an activated member, you may cancel for any reason and receive a full refund. But it will probably pay for itself before then. Members also save hours of research and reading time each week by using our filtered and curated library of ESG/sustainability resources covering over 100 sustainability subject areas – updated daily with practical and credible information.
Practical Guidance for Companies, Curated for Clarity.
