© Reuters. FILE PHOTO: The seal of the U.S. Securities and Exchange Commission (SEC) is seen at their headquarters in Washington, D.C., U.S., May 12, 2021. REUTERS/Andrew Kelly/File Photo
By Clark Mindock
(Reuters) – A U.S. judicial panel on Thursday consolidated at least nine lawsuits challenging the U.S. Securities and Exchange Commission’s new rules requiring public companies to report climate-related risks in a venue favored by Republican-led states and a business group.
The St. Louis-based 8th U.S. Circuit Court of Appeals was chosen randomly via a lottery and will consider the legal challenges to the landmark rule, which aims to standardize public company disclosures about greenhouse gas emissions, weather-related risks and how they are preparing for the transition to a low-carbon economy.
The court, which has 10 Republican-appointed active judges and one appointed by a Democratic president, was the venue where nine Republican-led states including Iowa, Montana and North Dakota and the business lobbying group American Free Enterprise Chamber of Commerce filed their challenge.
Representatives for the challengers did not immediately respond to requests for comment. The SEC declined to comment.
First proposed in 2022, the rules are part of Democratic President Joe Biden’s efforts to leverage federal agency rulemaking to address climate change threats.
They were approved by the SEC on March 6, and the first lawsuit seeking to block them was filed later that day.
The consolidated lawsuits include challenges filed by at least 25 Republican-led states, energy industry companies and business groups, including the U.S. Chamber of Commerce, the nation’s largest business lobby, seeking to overturn the rules.
They have argued, among other things, that the disclosure requirements amount to back-door environmental regulations that go beyond the SEC’s legal authority.
Challengers on the other side of the issue like the environmental organization the Sierra Club and Natural Resources Defense Council have meanwhile said the rules do not go far enough to protect investors, and arbitrarily stripped the final version of stronger reporting requirement rules.
The conservative-dominated 5th Circuit, the court where Texas and energy companies filed their challenges, temporarily paused the rules from going into effect on Friday.
The SEC is expected to ask the 8th Circuit to revisit that ruling. It had told the 5th Circuit a pause was unnecessary, since the rules have extended compliance deadlines that do not require disclosures before March 2026.
The agency has also said the rules “fit comfortably within” its authority to require disclosure of information important to investors, and that they would provide “consistent, comparable and reliable information” about climate risks.
The nine lawsuits were filed in six appeals courts. The 8th Circuit had previously set a deadline for the challengers who sued in that court to file their opening brief in May.
