Gary Gensler

U.S. Securities and Exchange Commission chairman Gary Gensler testifies during a Senate Banking Committee hearing on Capitol Hill September 12, 2023 in Washington, DC.

(Photo: Drew Angerer/Getty Images)

SEC Pauses Climate Disclosure Rules Under Attack by Republican AGs

"Investors need reliable, comparable information about risks that registered companies face and how they are managing those risks," argued Democratic attorneys general who support the paused policy.

The U.S. Securities and Exchange Commission announced on Thursday that it would pause the implementation of climate disclosure rules for U.S. companies while it awaits the rulings on legal challenges related to those rules.

"The commission has determined to exercise its discretion to stay the final rules pending the completion of judicial review of the consolidated 8th Circuit petitions," the agency said in its order. "The commission will continue vigorously defending the final rules' validity in court and looks forward to expeditious resolution of the litigation."

The rules are meant to force companies to make public any climate risks to their businesses. They have been challenged by attorneys generals from nine different states that are controlled by Republicans.

Meanwhile, 19 Democratic attorneys general are defending the policy, which they said in a Wednesday court filing "provides the states, their residents, and other investors with information about climate-related risks that is critical to making informed investment decisions."

"Investors need reliable, comparable information about risks that registered companies face and how they are managing those risks," the Democrats argued. "Climate-related impacts are undeniably one such category of risk."

Even if the rules were implemented, the SEC has been accused of "watering them down," because they don't include the greenhouse gas emissions related to companies' supply chains.

"Climate-related risks are financial risks, and investors have a right to know the full scope of a public company's emissions profile. This SEC decision will let big corporations off the hook in the United States, allowing them to avoid disclosure of emissions from throughout their supply chains," Sen. Ed Markey (D-Mass.) said when the rules were finalized last month

California has already passed legislation that requires large companies to disclose how much their supply chains are contributing to greenhouse gas emissions.

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