Earlier this month, 38 Congressional Democrats (10 Senators; 28 Representatives) sent a letter to Chairman Gary Gensler of the Securities & Exchange Commission (SEC), urging the SEC to robustly enforce its existing rules and climate disclosure-related guidance while the recent climate disclosure rules are under litigation and a related stay.
Among a number of other items, the letter asked the SEC to answer the following questions no later than June 18, 2024:
1. While the final rule is stayed and pending judicial review, will the SEC:
- Commit to enforcing the SEC's existing climate-related rules and guidance?
- Commit to releasing a statement to remind registrants that covered U.S. companies that are subject to alternative climate reporting regimes, such as those in California or the European Union (EU) or those promulgated by the International Sustainability Standards Board (ISSB), must comply with those reporting regimes?
- Commit to releasing a statement to registrants that are already disclosing Scopes 1, 2 and 3 greenhouse gas emissions that they should continue disclosing this information?
- Commit to sparing no resources to defend the rule in court?
2. Assuming the recent climate disclosure rules survive litigation, the letter also asks if the SEC will:
- Provide guidance to registrants on what constitutes "material" information, and how to conduct and disclose materiality assessments, under the climate risk disclosure rule?
- Recognize alternative climate reporting regimes such as those in California or the EU or those promulgated by the ISSB to provide registrants with more options to satisfy compliance with the rule, as well as the factors the SEC will consider as it makes this determination?
- Detail the enforcement and implementation resources it will devote to the rule?
- Detail its plan to prepare and train staff to implement and enforce the rule?
This letter reinforces the notion that climate matters will remain high on the SEC's agenda, regardless of the outcome to the SEC's recently enacted climate disclosure rules.
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