SEC pauses climate risk disclosure rules pending judicial review

The US Securities and Exchange Commission (SEC) has put a hold on proposed new climate-related disclosure rules pending judicial review.

The regulations, setting out requirements for companies to disclose climate risks, have been controversial, triggering lawsuits before they even come into force.

Last month, business lobby group the US Chamber of Commerce filed a lawsuit against the SEC over the climate disclosure rules. It said the rules are “flawed” with “substantively harmful changes to 50 years of corporate governance”.

Legal actions have also come from environmental groups on the other side of the debate, arguing that the rules have been pared back too far after requirements to disclose Scope 3 emissions through supply chains were dropped.

The SEC now says that while it “vigorously defends” the legislation, the final rules will be put before the 8th US Circuit Court of Appeals. This will allow “the orderly judicial resolution” of challenges to the rules and “allow the court of appeals to focus on deciding the merits”, it said.

Under the rules, listed firms will have to make clear their exposure to weather-related risks and what they are doing to manage the threats.