SEC ends defense of ICBA-opposed climate-disclosure rule

The Securities and Exchange Commission voted to end its legal defense of its ICBA-opposed rule requiring climate-related investor disclosures.

Details: Following the commission’s vote, SEC staff sent a letter to the Eighth Circuit—which has been hearing legal challenges brought by states and private parties—stating that the agency withdraws its defense of the rule. SEC Acting Chairman Mark Uyeda said the action ceases the agency’s involvement in the defense of the “costly and unnecessarily intrusive” rule.

Background: The SEC in April 2024 suspended implementation of the ICBA-opposed rule pending the outcome of the legal challenges. Issued in March 2024, the rule requires disclosures on material climate-related risks, activities to mitigate or adapt to such risks, board oversight, and greenhouse gas emissions that reporting companies produce or indirectly cause by their activities.

ICBA View: In a national news release after the SEC issued its final rule, ICBA criticized its unprecedented costs and potential liabilities. In a 2022 comment letter, ICBA said the rule would drive many SEC-registered community banks away from the public capital markets.