SEC Issues Final Climate Disclosure Rules: Rule's Future Subject To Challenge

After a 3-2 vote on March 6, 2024, the Securities and Exchange Commission (SEC) adopted final rules for public companies requiring disclosure of climate risk and greenhouse gas emissions. Although scaled back substantially from the SEC's March 21, 2022, proposed rules, the final rules will require almost all SEC-reporting companies to provide significant new disclosures in SEC filings and adopt new internal controls and procedures. However, large, multinational corporations that are covered by the California climate reporting regime in Senate Bills 253 and 261 and the European Corporate Sustainability Reporting Directive (CSRD) in addition to the SEC's final rules could be subject to overlapping but sometimes inconsistent reporting requirements. The final rules are subject to challenges that, if successful, could ultimately prevent covered companies from having to comply with final rule requirements. Congress has been preparing a resolution to repeal the rules under