Acting Chairman of the Securities and Exchange Commission (SEC) has taken action on a contentious climate-related disclosure rule. The Enhancement and Standardization of Climate-Related Disclosures for Investors rule was adopted by the commission in March 2024, but it is currently being challenged in court.
The Acting Chairman has expressed concerns that the rule is deeply flawed and could harm the capital markets and economy. He voted against the rule’s adoption alongside Commissioner Hester Peirce, who stated that existing disclosure rules were sufficient and that the rule’s benefits did not outweigh its costs.
Many submissions during the comment period raised concerns about the rule’s volume of required information, overlapping with existing climate-related risks already subject to disclosure, and overstepping the SEC’s regulatory authority. The Acting Chairman questions the agency’s statutory authority, need for the rule, and evaluation of costs and benefits.
The Acting Chairman has directed the Commission staff to notify the court of changes in circumstances due to recent changes in the commission’s composition and a Presidential Memorandum on Regulatory Freeze. This move aims to provide time for the Commission to deliberate and determine its next steps in the litigation.
The SEC’s briefs defending the rule do not reflect the Acting Chairman’s views, which were informed by extensive study and research from comments received from various stakeholders. The lack of statutory authority is a significant factor in his concerns, and he believes the court and parties should be notified of these changes.
Source: https://www.sec.gov/newsroom/speeches-statements/uyeda-statement-climate-change-021025