SEC halts implementation of its climate regulation amidst legal disputes

While it challenges the rule in court, the U.S. Securities and Exchange Commission has put a hold on the implementation of its new climate disclosure law. Upon its passage in March, the bill requiring certain publicly traded firms in the United States to disclose their greenhouse gas emissions and climate-related risks was immediately met with legal challenges.

According to the SEC, the rule was put on hold to prevent regulatory ambiguity while the lawsuit was still pending. Lawsuits proceeded, including those from environmental groups, despite the idea having been softened owing to lobbying and criticism.

The regulation requires important disclosures for investors, and the SEC intends to fiercely defend its validity. A low-carbon economic transition plan and reporting on climate-related risks are also mandated under the regulation, which is scheduled to go into force in 2026.

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