SEC pauses rules ordering companies to disclose climate risks: 'Extremist climate mandate'

WASHINGTON (TND) — The Securities and Exchange Commission (SEC) paused rules Thursday requiring companies to disclose business risks posed by the climate in their registration statements and annual reports.

The agency paused the adoption of amendments to the Securities Act of 1933 and Securities Exchange Act of 1934, which would have obligated companies to publish risks likely impacting business strategies, operations or finances.

Several business organizations had filed requests for pauses. With the SEC’s stay, the Eighth Circuit Appeals Court would be able to focus solely on the rules’ merits and avoid procedural challenges by streamlining resolutions to the groups’ petitions, according to the agency.

In issuing a stay, the Commission is not departing from its view that the Final Rules are consistent with applicable law and within the Commission’s long-standing authority to require the disclosure of information important to investors in making investment and voting decisions,” the SEC affirmed. “Thus, the Commission will continue vigorously defending the Final Rules’ validity in court.”

The agency added a stay would avoid regulatory uncertainty if the rules applied to companies whose requests for pauses were pending.

Last month, 25 states sued the SEC over the rule, including Iowa, who has argued the amendments were part of a “radical green scheme” by the Biden administration to influence investments.

Iowa Attorney General Brenna Bird claimed Thursday the rules constituted the “most outrageous” climate mandate for businesses since President Joe Biden took office.

The SEC’s job is to protect people from fraud. It has no business slapping companies with extremist climate mandates,” Bird said. “We are making it clear that Biden has to follow the law like everyone else.”

The attorney general argued the SEC’s stay would protect companies from “costly red tape,” secure the U.S. supply chain and defend family farms.

The SEC originally said the rules would allow investors to have relevant information when making decisions.

The rules will provide investors with consistent, comparable, and decision-useful information, and issuers with clear reporting requirements,” SEC Chairman Gary Gensler stated in March. “Further, they will provide specificity on what companies must disclose, which will produce more useful information than what investors see today.”

Risks’ disclosure in reports and statements would also assist with reliability, according to Gensler.

“Our federal securities laws lay out a basic bargain. Investors get to decide which risks they want to take so long as companies raising money from the public make what President Franklin Roosevelt called ‘complete and truthful disclosure,’” the chair noted.

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