The U.S. Securities and Exchange Commission (SEC) has temporarily paused the enforcement of its new climate disclosure requirements for companies, following several legal challenges. The rule, finalized in March, mandated publicly traded companies to report on 'climate-related risks' and greenhouse gas emissions. However, the rule's implementation has been halted as it faces scrutiny in a consolidated case in the Eighth Circuit court.

Republican states, various companies, and business groups filed lawsuits, arguing that the SEC exceeded its authority and that the rules would impose significant costs on businesses. In response to the legal disputes, the SEC Secretary Vanessa Countryman issued an order on April 4 to stay the climate rule requirements, stating that the stay "will facilitate the orderly judicial resolution of those challenges" and avoid "potential regulatory uncertainty."

Iowa Attorney General Brenna Bird, representing one of the 25 Republican-led states challenging the regulation, hailed the stay as a "victory" against what she termed "the most outrageous climate mandate for businesses since Biden took office." The SEC, while granting the stay, maintains that the rules are lawful and will continue to defend them vigorously in court.

The SEC's climate disclosure rule required businesses to detail their climate targets, financial impacts of climate risks, and losses from severe weather events. The rule was expected to affect approximately 2,800 American firms and was projected to incur substantial costs for businesses annually.

The rule passed in a 3-2 vote by the SEC commissioners, with Democrats in favor and Republicans opposing it. Critics, including Republican commissioner Hester Peirce, argued that the rule would be costly for businesses and burdensome in terms of producing a large volume of potentially inconsistent information for investors.

The lawsuits against the SEC rule contend that the commission has overstepped its regulatory bounds and that such rules should require congressional approval. The legal challenges also accuse the rule of being part of the Biden administration's agenda to prioritize climate policies over financial returns in investment decisions.

The future of the SEC's climate disclosure rule now hinges on the outcome of the legal proceedings in the Eighth Circuit.

Originally reported by The Epoch Times