The U.S. Securities and Exchange Commission (SEC) is on track to release climate reporting rules as early as March. The proposed rules, aimed at enhancing company disclosures around greenhouse gas emissions, have triggered speculation due to their perceived softened stance on emission requirements. As the impending government shutdown threatens to stall most agency operations indefinitely, it appears the SEC might expedite the process to adopt these regulations.
The deadline for Congress to reach a funding agreement for the SEC and other agencies is March 8, leaving the week of March 4 as the last window for the SEC to issue the rules pre-empting a potential agency closure. The SEC has traditionally held public voting for rules on Wednesdays, which hints that the regulations may drop on March 6.
Originally proposed in March 2022, the completion target for the climate rules has seen several extensions. There has been comprehensive lobbying from Republicans, some Democrats, and companies for the dilution of these regulations, particularly those addressing Scope 3 emissions which emanate from indirect sources such as supply chains or consumers’ use of products. Investor and environmental advocates have braced themselves for less stringent emissions disclosure norms for months.
The rules, once issued, may face legal scrutiny from entities such as the U.S. Chamber of Commerce, National Association of Manufacturers, and the American Farm Bureau Federation. These organizations, as well as a few moderate Democrats, have already voiced concerns about the potential impact of Scope 3 disclosure requirements on different industries, including farming.
Furthermore, any regulation approved in the next few months could potentially be revoked under the Congressional Review Act by a Republican-controlled House and Senate in the subsequent Congress, barring a presidential veto. The specifics regarding when the review act might come into play still remain unclear.
You can read more about the developments on Bloomberg Law.