SEC regulation slows ahead of expected climate disclosure rule (2023)
| Environmental, social, and corporate governance |
|---|
|
| • What is ESG? • Enacted ESG legislation • Arguments for and against ESG • Opposition to ESG • Federal ESG rules • ESG legislation tracker • Economy and Society: Ballotpedia's weekly ESG newsletter |
The Securities and Exchange Commission (SEC) under Chairman Gary Gensler has been less active in issuing regulations than any administration in recent history, having issued only 22 rules since April 2021. But more regulations are expected, including a climate disclosure rule that would require certain companies to disclose emissions to the agency. Bloomberg reported that the rule—now nearly a year late, according to Gensler’s own timeline—has generated both anticipation and pushback among observers:
| “ |
The SEC under Chair Gary Gensler is issuing regulations at its slowest pace in decades for a new presidential administration, risking leaving climate disclosure rules and other planned ESG reporting priorities unfinished. The Securities and Exchange Commission has adopted only 22 rules since Gensler became the agency’s leader in April 2021, according to a Bloomberg Law analysis. The tally was higher at the same point for the first SEC chairs of every administration since at least George W. Bush’s presidency, though Gensler is closing the gap. Gensler has less than a year and a half before Republicans could take control of the SEC in a new administration, raising expectations the commission intends to finalize a flurry of environmental, social and governance regulations and other rules in the coming months. … The climate disclosure rule—poised to become Gensler’s marquee regulation—is expected this fall. The SEC is aiming to adopt the rule by October, a year after an October 2022 completion date the agency initially targeted, according to commission rulemaking agendas. President Joe Biden’s 2020 campaign climate plan included a pledge to require “public companies to disclose climate risks and the greenhouse gas emissions in their operations and supply chains.” When the SEC released a draft proposal of the plan in March 2022, several business interests and about two dozen Republican state attorneys general threatened legal action if it moved ahead. The agency’s plans to require big companies to disclose the Scope 3 emissions from their supply chains and other indirect sources are a major point of contention. Gensler has said he’s heard concerns “loud and clear.” But the chair has declined to say how the climate disclosure proposal may change before it’s finalized—or confirm whether October is a realistic target for finishing it. … Time may be running out for the SEC to defend a climate rule against lawsuits, if Republicans take control of the agency in January 2025. Prospective court challenges to a final rule are unlikely to be resolved by then. A Republican-led SEC would have the power to end its defense of the rule, though litigation could continue. The Sierra Club and Earthjustice are strongly considering defending the regulation in court. They also may sue the SEC, if its rule is weaker than what the agency proposed. A final climate rule also faces a different challenge if the SEC punts the regulation too far into next year. A federal law, the Congressional Review Act, would let a Republican-controlled House and Senate in the next Congress quickly revoke regulations the SEC and other agencies issued in late 2024, if they avoid a presidential veto.[1] |
” |
See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
| |||||||||||||||||||||||
