The Securities and Exchange Commission (SEC) has moved a step closer to dropping its climate disclosure requirements for financial institutions and companies.
The US regulator’s acting chair, Mark Uyeda, described the rules as “deeply flawed” in a statement yesterday, arguing they “could inflict significant harm on the capital markets and our economy”.
The SEC started developing the rules back in 2022, under then-president, Joe Biden.
After pushback from industry and major delays, the final rules were published last March, and were substantially watered down from the original plans.
They no longer included any requirement to disclose on Scope 3 emissions, and even Scope 1 and 2 emissions stopped being mandatory for all entities.
Despite the concessions companies and Republican lawmakers almost immediately moved to sue the SEC over the introduction of the requirements. They argued, among other things, that regulation in the US already required financial institutions and issuers to report on any material risks to their investors.
The rule was delayed as a result of the lawsuits, which were consolidated to allow the SEC to argue against them all in a single case, lodged with the Eighth Circuit Court of Appeals.
Uyeda has now asked the judge not to schedule a date for the SEC to defend itself, because it wants to rethink its position.
Republican Uyeda stepped in as interim chair of the regulator after Gary Gensler resigned in January, in anticipation of Donald Trump’s return to office. While Gensler supported the original rules, Uyeda voted against the original rule.
His statement this week is widely seen as the first step towards ditching the requirements altogether.In response to the announcement, fellow SEC commissioner Caroline Crenshaw made a statement accusing Uyeda of acting “without the input of the full Commission”.
She said the SEC “did not” act outside its remit by mandating climate information from companies, as Uyeda suggested.
“The only things that have changed since the Rule was passed have been matters of politics and not substance,” she said. “As such, I disagree with the position unilaterally taken today by the acting chairman.”
The latest digital edition of IPE’s magazine is now available
No comments yet