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SEC Stays Climate Disclosure Rules Due to Ongoing Litigation

S.J. Steinhardt
Published Date:
Apr 5, 2024

The Securities and Exchange Commission (SEC) will stay its new rules on climate-related disclosures, The Wall Street Journal reported.

The SEC filed the stay with the U.S. Court of Appeals for the Eighth Circuit, in part to avoid regulatory uncertainty as litigation proceeds, the Journal reported.

Last month, the U.S. Circuit Court of Appeals for the fifth Circuit granted a request for an administrative stay in a case brought by two fracking companies, Liberty Energy and Nomad Proppant Services.

The SEC said it still believes the rules are lawful and within its power to order, but it wants to focus on defending the rules' merits against legal challenges. “A Commission stay will facilitate the orderly judicial resolution of those challenges and allow the court of appeals to focus on deciding the merits,” the SEC said, according to the Journal.

“These changes will only create more confusion and undermine investor confidence in our public company system,” Tom Quaadman, executive vice president of the U.S. Chamber of Commerce’s capital-markets group, said when the Chamber filed its lawsuit along with the two fracking companies.

While the rules' reporting requirements weren’t slated to go into effect until 2026, many businesses have been preparing to comply. Other jurisdictions, including California, have started to require climate-related reporting from both publicly traded and privately held companies.

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