US SEC expects challenges to climate disclosure rules

Significance

The SEC is one of several independent federal agencies being targeted by conservative legal activists seeking to shrink federal government powers and undermine the Biden administration’s policy agenda. It is currently struggling to ensure rules on climate risk disclosure can withstand legal challenges.

Impacts

• Earlier rulings in the case under Supreme Court review are being used to challenge rule-making jurisdiction at other agencies.
• The Consumer Financial Protection Bureau would also be vulnerable to a similar legal challenge.
• Proposed SEC rules on artificial intelligence and cybersecurity risk disclosures will be less contentious than climate risk disclosure.
• The SEC's wish to regulate cryptos under securities law will be an inter-agency dispute more than a partisan one.