SEC reverses course on ICBA-opposed climate rule

Acting Securities and Exchange Commission Chair Mark Uyeda said his agency will seek to freeze court proceedings in a legal challenge to its final rule requiring climate-related investor disclosures, citing his opposition to the rule.

Details: Uyeda said he has directed SEC staff to ask the Eighth Circuit to not schedule the case for argument while the commission determines appropriate next steps, citing:

• His and Commissioner Hester Peirce’s votes against the SEC rule.

• Opposition by many public commentors.

• Weighty questions about whether the SEC had statutory authority to issue the rule.

• Concerns about the agency’s evaluation of costs and benefits.

• The recent change in composition of the agency under the new administration.

• President Donald Trump’s rulemaking freeze.

Background: The SEC in April 2024 suspended implementation of the ICBA-opposed rule pending the outcome of the legal challenges, pledging to defend the rule in court. 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 the 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.

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