SEC climate rule triggers flurry of lawsuits

The US Securities and Exchange Commission (SEC) on March 6 finalized its climate disclosure rule, which requires publicly traded firms to disclose greenhouse gas emissions to investors. Since then, at least 12 lawsuits have been filed against the SEC by environmental advocacy groups, state attorneys general, fracking companies, and others.

After one filing, made March 15 in the US Court of Appeals for the Fifth Circuit, a judge granted an emergency stay—meaning that the rule cannot go into effect while the cases proceed. Companies had been required to report emissions starting in March 2026.

The SEC’s initial proposal of the emissions reporting rule in March 2022 was followed by a long, contentious comment period. Much of the discussion addressed Scope 3, a section requiring companies to report emissions along their supply chains. The agency removed Scope 3 entirely in the final version of the rule; it also made some parts less specific and some parts optional.

The environmental groups—the Sierra Club and the Natural Resources Defense Council—are suing the SEC on the grounds that the rule doesn’t go far enough without Scope 3. Other parties involved in lawsuits include multiple state attorneys general, the Ohio Bureau of Workers’ Compensation, the fracking company Liberty Energy, and the US Chamber of Commerce.

Because the lawsuits were filed in several different courts, the US judicial panel on multidistrict legislation consolidated them and decided by lottery to assign the US Court of Appeals for the Eighth Circuit to review the petitions on the federal cases.