SEC Pauses Climate Disclosure Rules

Capital Markets

On April 4, 2024, the Securities and Exchange Commission (the “Commission”) voluntarily issued an order staying its recently adopted climate disclosure rules  (the “Final Rules”), pending the completion of judicial review of the consolidated Eighth Circuit petitions. As noted in our recent client alert, after adoption, the Final Rules were quickly subject to numerous legal challenges, including suits in the Second, Fifth, Sixth, Eighth, Eleventh and D.C. Circuits.

The Commission noted in the order that, “In issuing a stay, the Commission is not departing from its view that the Final Rules are consistent with applicable law and within the Commission’s long-standing authority to require the disclosure of information important to investors in making investment and voting decisions. Thus, the Commission will continue vigorously defending the Final Rules’ validity in court and looks forward to expeditious resolution of the litigation.”

The ultimate scope of the Final Rules following judicial review is uncertain and it is possible that the compliance deadlines, which are set to be phased-in over a few years, will be pushed back. The Final Rules call for varying compliance deadlines, beginning with large accelerated filers for fiscal year 2025 (in filings made in 2026).

The order does not stay any other Commission rules related to climate disclosure and the Commission explicitly confirmed that its 2010 Guidance Regarding Disclosure Related to Climate Change is still in effect.

Lorna A. Knick is a member of the Capital Markets practice group of Wyrick Robbins, which represents public company clients across a broad range of industries in connection with their SEC reporting and corporate matters, and significant financing transactions. The Capital Markets group publishes Client Alerts periodically as a service to clients and friends. The purpose of this Client Alert is to provide general information, and it is not intended to provide, and should not be relied upon as, legal advice.