(Reuters) — The U.S. Securities and Exchange Commission will vote March 6 on whether to adopt rules requiring U.S.-listed companies to report climate-related risks, the agency said in a notice Wednesday.
The rules aim to standardize climate-related company disclosures about greenhouse gas emissions, risks and how much money companies are spending on the transition to a low-carbon economy. The agency says that such information is important for investors.
Currently, U.S. securities regulations do not impose common standards for climate-related disclosures. But the agency says that investors need such information to be consistent and comparable across the many companies increasingly producing climate information on their own terms.
First proposed two years ago, the rules are part of President Joe Biden’s effort to address climate change threats through federal agencies and would join similar requirements in California and Europe.
Top Democratic lawmakers, reform advocates and environmental groups have urged the SEC to adopt “strong” rules requiring detailed disclosures of emissions, risks and capital spending.
But the pending regulations have been bogged down by pushback from companies and Republican state officials who say they overreach the SEC’s remit and will be burdensome for companies. They are expected to bring legal challenges once the rules are finalized.
While the SEC has not published a final draft, it has dropped its most ambitious “Scope 3” plank, which would have required companies to disclose emissions from their supply chains. That change could help the rules withstand court challenges, sources said.
Concerns over whether the rules could withstand a legal challenge were fueled by a 2022 Supreme Court decision curbing the Environmental Protection Agency’s power to regulate emissions. Encouraged by a more conservative-leaning judiciary skeptical of regulatory overreach, business groups are also generally growing bolder about litigating agency rules.
