The Securities and Exchange Commission on Thursday issued a stay on enforcement of its climate disclosure final rule while federal courts consider several challenges to the regulation brought by businesses and business groups. The rule, which was approved by the SEC in March, would require companies to disclose material climate-related risks, activities to mitigate or adapt to such risks, and information about the board’s and management’s oversight of risks. Several entities have since sued the SEC challenging its authority to promulgate its rule.
In an April 4 order, the SEC said it is using its discretion under the Administrative Procedure Act to stay the rule pending judicial review. The SEC added that the order does not mean it believes the rule violates the law, and that it will continue to vigorously defend the rule in court.
“Among other things, given the procedural complexities accompanying the consolidation and litigation of a large number of petitions for review of the final rules, a commission stay will facilitate the orderly judicial resolution of those challenges and allow the court of appeals to focus on deciding the merits,” the SEC said. “Further, a stay avoids potential regulatory uncertainty if registrants were to become subject to the final rules’ requirements during the pendency of the challenges to their validity.”
