SEC climate disclosure rules face more legal action
April 3rd, 2024
The Securities and Exchange Commission (SEC) will face further legal action over its climate disclosure rule.
Liberty Energy and Nomad Proppant Services filed a lawsuit to block the new rule in the US District Court for the Norther District of Texas on March 28, Pensions & Investments reports.
This marks the second lawsuit from Liberty Energy, which filed a petition with the Fifth Circuit US Court of Appeals the week before, criticising the new requirements for going beyond the scope of the SEC’s jurisdiction.
In response to the petition, the rule was temporarily halted by the court. On March 22, the 8th US Circuit Court of Appeals in St. Louis was selected to hear nine lawsuits challenging the rule, including the petition from Liberty Energy, on a consolidated basis.
The regulator announced its final rules at the start of March, after more than a year wrestling over the requirements.
The final version of the rules will require registrants to disclose certain climate-related information in registration statements and annual reports. It will not require disclosures from Liberty Energy until March 2026.
The rules have been criticised by anti-ESG campaigners as being too far-reaching and burdensome on companies.
However, the SEC has also faced backlash from pro-ESG activists, including the Sierra Club, for “weakening” the reporting requirements.
The original draft proposals for the climate disclosure rule included the requirement for companies to disclose Scope 3 emissions, which include those generated by a company’s supply chain and customers, if material. However, Scope 3 emissions were not included in the final draft of the rule.
Last Updated: 4 April 2024