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On April 4^th 2024, the much-awaited Climate Rule was officially put on pause as several lawsuits challenging the climate disclosure requirements have been consolidated in the 8^th Circuit United States Court of Appeals.

Even with this legislation on hold, companies are still moving to align with the U.S. Securities and Exchange Commission (SEC) rule, as well as recent California Senate Bills 253 and 261 which require many large companies that do business in California to report both their green house gas emissions and climate-related financial risks. 

The History of the SEC Climate Rule  

In 2021, the SEC requested public comment on proposed guidance on climate disclosure. The agency received more than 10,000 comments from various groups. Additional input was gathered when the was released in 2022. Opposition to the legislation included claims that the SEC was going beyond its jurisdiction and that requirements were overly burdensome for companies.  

Ultimately, the final rules included less stringent requirements on companies such as the removal of the mandate to report scope 3 emissions. It also reduced requirements for scope 1 and 2 emissions and assurance, including delaying the date at which reporting these emissions would be required.  

On March 6^th 2024, the SEC announced the approval of the final rule which was promptly from March 15^th to 22^nd due to litigation in the US Court of Appeals for the Fifth Circuit. Plaintiffs ranging from companies and the U.S. Chamber of Commerce to environmental NGOs and climate advocates, filed lawsuits. With the litigation moving to the Eighth Circuit, the SEC on the legislation pending completion of the judicial review. 

What’s Next  

The most recent updates may cause more uncertainty among companies on how and when to comply with federal climate disclosure mandates. However, the stay may position the SEC on a faster track to a court decision by streamlining plaintiffs’ requests to pause the rule. 

º£½ÇÊÓƵ guides our clients as they navigate the SEC ruling and numerous new domestic and global disclosure requirements. For example, new regulations such as the recently adopted California Senate Bills 253 and 261 and the European Union Corporate Sustainability Reporting Directive require both public and private companies to disclose ESG performance and risk data. They also utilize new frameworks, a variety of assurance levels, and compliance boundaries adding to confusion and reporting anxiety. 

How º£½ÇÊÓƵ Can Help 

º£½ÇÊÓƵ has a skilled team of strategic ESG Advisors and a deep technical bench of analysts and engineers to support your company’s compliance with demands from regulators, investors, and customers. We offer a range of highly relevant services, including: 

• ESG Strategy, Execution and Disclosure  
• Regulation review and gap analysis (e.g. SEC Climate Disclosure Rule, CA SB 253 & 261, CSRD, IFRS, TCFD) 
• GHG Accounting
• Net Zero Strategy 
• Portfolio Decarbonization Strategy 
• Climate-Related Physical and Transition Risk Assessment (in alignment with TCFD)
• Climate Risk Assessment Standard Operating Procedure 
• Climate Action Plans 
• Resilience Planning
• Social Impact Assessments 
• Target setting 
• Data Review and Validation
• Reporting Strategy and º£½ÇÊÓƵ