Republicans file for SEC climate rules to be scrapped
June 27th, 2024
A group of 35 Republican lawmakers have urged the Eighth US Circuit Court of Appeals in St Louis to vacate the SEC’s climate disclosure rules.
The group, which includes Shelley Moore Capito, Senator for West Virginia, filed a bicameral amicus brief in Texas Alliance of Energy Producers, et al v. SEC requesting the court vacate the rule.
In the US, lower federal courts can vacate, or set aside, an agency rule that a district court found unlawful.
The brief stated: “The SEC, as a securities regulator, is not empowered to impose sweeping climate-related regulations on publicly traded companies… The SEC’s overreach into climate regulation violates the separation of powers and the major questions doctrine, warranting the rule’s invalidation.”
It also argued that the rules conflict with existing federal securities law and contravene the principle of materiality, a cornerstone of federal securities law.
It said: “By focusing on environmental impacts rather than financial materiality, the Climate Rule deviates from the SEC’s statutory mandate.”
The SEC adopted its final climate disclosure rules in March after more than a year wrestling over the requirements.
The rules introduced requirements for companies to disclose their Scope 1 and 2 emissions, which covers direct greenhouse gas emissions, such as those from any boilers or furnaces owned by the organisation, and indirect emissions, which includes any emissions associated with the purchase of electricity, steam, heat, or cooling.
However, they fell short of requiring companies to disclose Scope 3 emissions, emissions that occur as a result of activities from assets not owned by the reporting organization but from further down in the value chain.
Despite this, the rules were immediately met with legal backlash from Republicans and high-emitting companies, and just weeks later they were temporarily halted by a judge in the Fifth Circuit US Court of Appeals.
Last Updated: 28 June 2024