US SEC adopts climate-related risk disclosure rules
![10 Republican states sue US SEC over climate risk disclosure rules](https://sustainabilityeconomicsnews.com/wp-content/uploads/2024/03/Depositphotos_535027780_S.jpg)
On Wednesday, Wall Street’s top regulatory body voted to implement a regulation mandating public companies to disclose specific climate-related risks, marking a first-of-its-kind rule.
The decision prompted a varied reaction, with ten Republican-led US states pledging to file a lawsuit against the US Securities and Exchange Commission.
At the same time, the primary US business association also indicated potential legal action against the agency.
Although several environmental organizations praised the regulation, they expressed disappointment, stating they had anticipated more stringent mandates.
The Republican-led states, including Georgia, Alabama, and Alaska, lodged their petition at the 11th US Circuit Court of Appeals in Atlanta.
The regulations seek to establish uniformity in company disclosures concerning greenhouse gas emissions, weather-related risks, and readiness for the shift towards a low-carbon economy.
Initially introduced in 2022, these regulations are a component of Democratic President Joe Biden’s initiatives to utilize federal agency rulemaking to confront climate change risks.
Comparable disclosure mandates have been embraced in Europe and California.
During a press briefing on Wednesday, West Virginia Attorney General Patrick Morrisey asserted that the Biden administration is attempting to manipulate public companies to advance its climate agenda.
The Sierra Club, one of the United States’ largest environmental advocacy organizations, stated that it is contemplating legal action to contest the SEC’s decision to scale back the more stringent reporting standards.
Additionally, the group affirmed its intention to uphold the SEC’s legal authority to issue and execute the regulations.
Business associations, including the US Chamber of Commerce, have initiated litigation in California’s state court challenging the state’s climate disclosure statutes, encompassing Scope 3 emissions reporting obligations.
The lawsuit, filed in January, contends that the state’s laws mandating such disclosures will impose substantial costs on businesses and infringe upon free speech protections enshrined in the US Constitution.
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