Overview

• The SEC has paused the implementation of its climate disclosure rule, which mandates U.S. public companies to report greenhouse gas emissions and climate risks.
• Legal challenges arose immediately after the rule's finalization, prompting a stay to avoid regulatory uncertainty while court proceedings continue.
• The rule, which was finalized in March, has been criticized for being watered down from its original proposal, leading to lawsuits from both business groups and environmental organizations.
• Despite the pause, the SEC intends to vigorously defend the rule's validity, asserting its authority to require investor-relevant disclosures.
• The rule's requirements, including the reporting of indirect emissions known as Scope 3, were set to take effect in 2026, aligning with similar regulations in other jurisdictions.