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SEC Climate Disclosure Rule Faces Legal Challenges, Companies Prepare to Comply

Despite multiple lawsuits challenging its authority, the SEC's new rule on climate disclosure has prompted companies to start compliance preparations.

Overview

  • The SEC's new climate disclosure rule, requiring companies to report certain emissions and climate-related information, faces multiple lawsuits but companies are preparing to comply regardless.
  • The rule, softened from its original proposal, allows companies some discretion in reporting emissions and exempts some smaller companies entirely.
  • A coalition of 10 states and various industry groups, including the U.S. Chamber of Commerce, have filed lawsuits challenging the SEC's authority and the rule's impact.
  • Despite legal challenges, experts believe companies will continue preparing for compliance due to similar requirements in California and the European Union.
  • The legal battle over the SEC rule is expected to be lengthy, with a potential consolidation of cases and a lottery process to decide the appellate court for hearing.