A federal appeals court paused financial rules issued by the Securities and Exchange Commission (SEC) that will force private companies to publicly disclose their carbon emissions and risks climate change poses to their business.
In a short ruling issued Friday, the U.S. Court of Appeals for the Fifth Circuit paused the SEC’s climate disclosure rule, but declined to offer any explanation for the decision. The ruling, though, came in response to petitions for review filed by energy companies Liberty Energy and Nomad Proppant Services, the states of Louisiana, Mississippi and Texas, and business groups Chamber of Commerce, Texas Alliance of Energy Producers and Domestic Energy Producers Alliance.
“For two years now, the U.S. Chamber of Commerce has raised significant concerns about the scope, breadth, and legality of the SEC’s climate disclosure efforts,” Tom Quaadman, the executive vice president of the Chamber of Commerce’s Center for Capital Markets Competitiveness, said in response to the SEC’s disclosure rules.
“The Chamber will continue to use all the tools at our disposal, including litigation if necessary, to prevent government overreach and preserve a competitive capital market system,” he continued.
Under the leadership of Chairman Gary Gensler, whom President Biden appointed to the role, the SEC approved the climate disclosure rules on March 6 in a 3-2 vote after nearly two years of heated deliberations.
The SEC said in a statement that the rules reflect “investors’ demand for more consistent, comparable, and reliable information about the financial effects of climate-related risks.” And Gensler said they will further guarantee companies “produce more useful information than what investors see today.”