The Securities and Exchange Commission is pausing its legal defense of a rule requiring public companies to disclose climate-related risks, a move that could lead to its repeal.
Matthew Goldstein reports for The New York Times.
In short:
- Acting SEC Chair Mark Uyeda directed the agency to stop defending the climate disclosure rule in court, citing concerns over its legality and economic impact.
- The rule, enacted under former SEC Chair Gary Gensler, requires companies to report greenhouse gas emissions and climate-related financial risks to investors.
- Business groups and 19 Republican-led states challenged the rule, arguing it is unnecessary and exceeds the SEC’s authority.
Why this matters:
The decision to halt the rule designed to increase investor transparency on climate risks is a setback for those pushing for corporate accountability on environmental issues. Without such regulations, companies face fewer obligations to disclose how climate change could affect their bottom lines, leaving investors with limited insight into potential financial risks. Critics argue that reversing course primarily benefits industries with heavy carbon footprints while undermining long-term financial and environmental stability. The move comes at a time when extreme weather events and shifting consumer expectations are putting pressure on businesses to take climate-related risks more seriously.
Learn more: Oil and gas firms hide climate impacts in investments
