SEC's New , Climate Disclosure Rules , Facing Multiple Lawsuits.
'Newsweek' reports that both industry and environmental groups have legally challenged the Securities and Exchange Commission over new rules.
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The new rules require some businesses to disclose information about climate risks, including direct greenhouse gas emissions and risks from extreme weather.
The SEC rules, which were approved on March 6 by a 3-2 vote, also require companies to provide investors with context on how those companies plan on managing those risks.
Some requirements were pared back prior to the rules being approved.
Those rules include reporting on Scope 3 emissions which relate to the company's supply chain.
In response to the new rules, two fossil fuel producing companies filed lawsuits accusing the SEC of burdening companies and exposing them to potential litigation.
19 state attorney generals have also filed lawsuits claiming that the new rules exceed the SEC's legal authority.
On the other side, environmental groups the Sierra Club Foundation and Earthjustice announced their own lawsuits accusing the SEC of watering down rules to protect investors.
Sierra Club has millions of members and supporters who have investments in the market.
It's really critical that we have access to information about climate risks that may be faced by the kinds of entities that we would hope to invest in, Andres Restrepo, Sierra Club Senior Attorney, via Newsweek.
'Newsweek' reports that the SEC rules were meant to take effect in 2026, however, the legal challenges are likely to result in delays.
The new rules come as the U.S. Supreme Court has indicated plans to restrict the regulatory authority of environmental enforcement agencies.
