BONNER COHEN: Trump SEC Will Not Defend Biden

In a widely expected move, the Trump administration will not defend a Biden-era Securities and Exchange Commission (SEC) climate disclosure rule under challenge by a slew of red-state attorneys general and industry groups.

The White House’s hostility to the “Enhancement and Standardization of Climate-Related Disclosures for Investors” rule, and to the broader Biden climate agenda of which it was a part, was never in doubt.  ”This rule is deeply flawed and could inflict significant harm on the capital markets and our economy,” said Mark Uyeda, acting chair of the SEC, in a statement issued in February.

Under the sweeping regulations issued last year, companies regulated by the SEC would be required to disclose climate-related emissions, risks, and spending.  Though the March 6, 2024 final rule had been scaled back somewhat from the SEC’s original 2022 proposal, it still would have required an estimated 7,000 domestic publicly traded companies and 900 foreign firms to make climate-related disclosures.  Issued during the height of the push by the Biden administration and some Wall Street investment firms to adopt ESG (environmental, social, and governance) investing practices, the SEC climate disclosure rule was meant to enlist more companies in the green-energy transition.

“The importance of climate-related disclosures for investors has grown as investors, companies, and the markets have recognized that climate-related risks and its current and longer-term financial performance and position,” the Biden SEC’s fact sheet stated.

Though the SEC rule certainly captured the spirit of the climate-centric regulatory thrust of the Biden era, its complexity, loose language, and potential for liability for companies caught up in its web were bound to trigger resistance.  The paperwork burdens for companies forced to comply were enormous, and made even more onerous by the rule’s use of