Sierra Club sues SEC over climate disclosure rule

The environmental advocacy group Sierra Club is suing the Securities and Exchange Commission (SEC), saying its new rules are not giving investors the full truth about companies’ climate risks.

The Sierra Club Foundation, represented by the Sierra Club and Earthjustice, filed a lawsuit On Wednesday, it joined a growing list of states that have challenged the rule.

The rules in question require publicly traded companies to disclose some of the risks that climate change poses to their businesses. It also requires large and medium-sized companies to disclose the amount of carbon dioxide emitted by their business activities.

Although nearly 20 states have opposed the SEC’s rules, arguing that it would be an unnecessary burden for companies to reveal information they want to keep private, the Sierra Club says consumers should be aware that the companies in which they invest argued that the country has a right to know its impact on the climate.

“These investors cannot properly manage their investments without complete information about the vulnerability of listed companies to climate-related risks, including their greenhouse gas emissions profiles,” the statement said. “By allowing companies to selectively report their emissions, the SEC is failing in its statutory obligations to protect investors, maintain fair, orderly and efficient markets, and promote capital information.” .”

These organizations affirm the SEC’s legal authority to require climate-based disclosures and call on the SEC to “fulfill its obligation to protect investors.”

Hana Vizcarra, senior attorney at Earthjustice, said: stated in a statement SEC rules do not require companies to disclose to investors all the climate risks they pose.

“While the SEC has the legal authority to issue rules, the SEC bowed to industry pressure and finalized rules that exposed investors to greenwashing and a rapidly widening disclosure gap,” Vizcarra said. .

The SEC’s rules were finalized last week. Since then, several states have filed lawsuits claiming the mandate would impose “costly red tape on businesses” and “disrupt” supply chains.

Although states have argued that the rule goes too far, the Sierra Club requires some companies to report emissions resulting from the use of their products, in the same way oil companies report emissions resulting from the use of their products. After the SEC withdrew a proposed requirement to report on the issue, it said the rule did not go far enough. It burns fuel to power cars across the country.

“Through legal action, all investors, including the Sierra Club and its members, will have the information they need to assess a company’s climate-related risks, make wise investment decisions, and protect their assets for decades to come. We want to make sure we have the best possible access to it,” Sierra Club Executive Director Ben Jealous said in a statement.

In an emailed statement, an SEC spokesperson said, “The Commission will work to develop a rule consistent with the laws governing the agency’s authority and administrative procedures, and will vigorously defend the final climate risk disclosure rules in court.” ” he said.

Story updated at 8:15 p.m.