Sierra Club Sues SEC Over Climate Disclosure Rule

The environmental advocacy group Sierra Club sued the Securities and Exchange Commission (SEC), arguing that the agency's new rule does not give investors the full truth about a company's climate risks.

The Sierra Club and the Sierra Club Foundation, representing Earthjustice, Filed a case Wednesday, joining a growing list of states that have filed challenges to the ruling.

The rule in question requires publicly traded companies to disclose certain risks that climate change poses to their business. Large and medium-sized companies must disclose how much carbon dioxide their operations emit.

While nearly 20 states opposed the SEC's rule, arguing that it creates an undue burden for businesses to disclose information they want to keep private, the Sierra Club said consumers should be aware of the climate impacts of the companies they invest in.

“Without complete information about the vulnerability of publicly traded companies to climate-related risks, including details of greenhouse gas emissions, these investors cannot adequately manage their investments,” the statement said. “By allowing companies to selectively report their emissions, the SEC has lost its statutory mandate to protect investors, maintain fair, orderly and efficient markets, and promote capital disclosure.”

The companies affirm the SEC's statutory authority to require climate-based disclosures and call on the company to “fulfill its duty to protect investors.”

Hana Vizcarra is a senior attorney at Earth Justice. said in a statement The SEC's rule does not require companies to show investors the full climate risks they pose.

“Despite having the statutory authority to issue the rule, the SEC succumbed to industry pressure and finalized a rule that exposes investors to greenwashing and rapidly widening gaps,” Vizcarra said.

See also  Tesla recalls nearly half a million electric cars for safety reasons

The SEC's rule was finalized last week. Since then, several states have filed lawsuits arguing the mandate imposes “costly red tape on businesses” and would “devastating” supply chains.

While states argued the rule goes too far, the Sierra Club said it doesn't go far enough, especially after the SEC dropped proposed requirements for some companies to report emissions from the use of their products, like oil companies reporting emissions. By burning fuel to drive cars across the country.

“Through legal action, we hope to ensure that all investors, including the Sierra Club and its members, have the information they need to assess companies' climate-related risks, make wise investment decisions, and protect their assets for decades to come.” Ben Gelus, executive director of the Sierra Club, said in a statement.

“The Commission is pursuing rules consistent with the laws governing its powers and administrative process and will vigorously defend the final climate risk disclosure rules in court,” an SEC spokesperson said in an emailed statement.

Story updated at 8:15 p.m

Copyright 2024 Nexstar Media Inc. All rights reserved. This content may not be published, broadcast, rewritten or redistributed.

Leave a Reply

Your email address will not be published. Required fields are marked *