Statement On Pause In Litigation Concerning The Climate-Related Disclosure Rule, SEC Commissioner Caroline A. Crenshaw

Today acting Chairman Uyeda, without the input of the full Commission, has instructed the staff to ask the Eighth Circuit Court of Appeals to delay scheduling oral arguments in litigation challenging the Climate-Related Disclosure Rule.[1] The Commission’s briefs, “do not reflect [the acting Chairman’s] views,” he wrote in a statement. As such, the court should be “notified” of certain changes, such as the change in composition of the Commission, and the recent Presidential Memorandum regarding a Regulatory Freeze.[2]

The acting Chairman’s public statement on the litigation quoted from his and Commissioner Peirce’s statements at the time the Climate-Related Disclosure Rule was adopted. To complete the proverbial picture, I noted then[3] (and reiterate now) that:

• As reflected in the comment file, investors, “for years,” have been calling for “consistent, comparable, and reliable climate risk disclosures.”
• “The Commission has clear authority under the Securities Act and the Exchange Act to require disclosures that are in the public interest.... This well-established authority has been consistently relied upon, and affirmed and reaffirmed across dozens of disclosure rulemakings over multiple decades.” Under this deep-rooted framework “[o]ur disclosures cannot remain stagnant; we must provide investors the information they need to understand the risks associated with their public company investments in today’s world. A different outcome would harm the markets and investors.”

• “The critiques that I have heard about our rulemaking attempt to disguise our authority as something that it is not. It is said that we are not an environmental agency and that we should not be in the business of supporting green agendas or setting pollution standards. Those statements are true. But, we are in the business of requiring public company disclosure about risk. We have done it myriad times without having our authority questioned.”

I agree wholeheartedly with the acting Chairman that agencies and those who lead them must act within the boundaries of constitutional and statutory authority. Nonetheless, I dispute with equal vigor the notion that the agency acted outside of its remit. It did not. The only things that have changed since the Rule was passed have been matters of politics and not substance. As such, I disagree with the position unilaterally taken today by the acting Chairman.