Fifth Circuit hits pause on the SEC climate disclosure rule: CEI analysis

A controversial climate disclosure rule put forward by the Securities and Exchange Commission has been stopped by a federal appeals court. On Friday, March 15, the Fifth Circuit Court of Appeals halted the final rule by imposing an emergency stay. CEI experts offer analysis of the legal and policy implications of the court’s action.

Statement by Devin Watkins, CEI attorney:

“The SEC tried to impose billions in compliance costs on America’s publicly traded companies. The Commission did so to advance its own political agenda about one of the most hotly debated political topics today: the effects of climate change on our lives. This is, unambiguously, a major question that can only be decided by Congress. Companies are already required to disclose materially relevant information, which has never included such climate disclosures. Furthermore, the SEC lacks the authority to require disclosure of nonmaterial information. The court’s suspension of this rule is a good development; it should never have been issued.”

Statement by Stone Washington, CEI research fellow:

“The climate disclosure rule represents bad policy because SEC regulators unilaterally determined that climate change risks deserved corporate disclosure. This is the first regulatory-driven disclosure of information beyond what companies would already deem materially relevant for investors in their existing disclosures.”

Related analysis:

Big Problems with SEC Climate Disclosure Mandate

The SEC’s Climate-Disclosure Rule Goes against 90 Years of Restraint