A panel of U.S. judges has consolidated multiple lawsuits contesting the Securities and Exchange Commission’s (SEC) recent regulations mandating public companies to disclose climate-related risks.
The 8th U.S. Circuit Court of Appeals in St. Louis, known for its majority of Republican-appointed judges, will review these legal challenges.
These lawsuits, including those from Republican-led states and business entities like the American Free Enterprise Chamber of Commerce, argue against the SEC’s authority and claim the disclosure requirements exceed the agency’s mandate.
Proposed in 2022 and approved by the SEC in March 2023, these regulations are part of President Joe Biden‘s initiatives to address climate change through federal agency actions. However, opponents argue that these rules impose indirect environmental regulations and go beyond the SEC’s jurisdiction.
Environmental groups like the Sierra Club and Natural Resources Defense Council criticize the rules for not being stringent enough to protect investors and for diluting initial reporting requirements.
The 8th Circuit’s selection follows a temporary pause in the rules’ implementation by the conservative-dominated 5th Circuit, where Texas and energy firms filed their challenges.
The SEC, disputing the necessity of this pause, plans to contest it, emphasizing that the regulations offer essential information to investors and ensure consistent climate risk disclosure.
This legal battle involves nine lawsuits spread across six appeals courts, highlighting the complexity and significance of the issue. The 8th Circuit has set a deadline for May for the plaintiffs to submit their opening arguments.
As debates intensify over the SEC’s authority and the scope of climate risk disclosures, the outcome of these legal proceedings will have far-reaching implications for both businesses and environmental advocacy.
