The U.S. Securities and Exchange Commission on Thursday said it would pause the implementation of its new climate disclosure rule while it defended the regulation in court.
FILE - The sun sets behind an idle pump jack near Karnes City, Texas, April 8, 2020. The U.S. Securities and Exchange Commission paused on Thursday, April 4, 2024, the implementation of its new climate disclosure rule while it defends the regulation in court. new climate disclosure ruleWall Street's top regulator voted in March on the final rule, which requires some public companies in the U.S. to report their greenhouse gas emissions and climate risks.
The rule adopted in early March was watered down from what the nation’s top financial regulator had proposed two years ago, after it faced lobbying and criticism from business and trade groups and Republican-led states that argued the SEC had overstepped its mandate. But that didn't stave off lawsuits. After the final rule was approved, environmental groups including the Sierra Club also sued, saying the SEC's weakened rule did not go far enough.
The SEC said it would continue “vigorously defending” the validity of its climate rule and believes that it had acted within its authority to require disclosures important to investors. A stay would “allow the court of appeals to focus on deciding the merits,” the SEC said in a statement. In addition to reporting greenhouse gas emissions, the rule requires U.S.-listed companies to publicly report theirThe agency dropped a requirement that would have had companies report some indirect emissions known as Scope 3. Those don’t come from a company or its operations, but happen along its supply chain — for example, in the production of the fabrics that make a retailer’s clothing.
The SEC’s reporting requirements would not have taken effect until 2026. Many companies are preparing to comply with similar rules in other jurisdictions, such as California and the European Union, which recently moved ahead with their own disclosure requirements. California's rule is also facing legal challenges.The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content.
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