ANALYSIS: SEC’s Climate Rules Face Skeptical Courts, APA Hurdle

Climate-related disclosures forecast: The Securities and Exchange Commission will adopt climate disclosure rules in 2023; opposition will be fierce; and, unless the proposed rules are retooled prior to their adoption, a court will likely either remand and order that the rules be reworked or vacate them.

Legal challenges should be expected on many fronts—including a major questions doctrine or Chevron deference analysis, and under the First Amendment—and from diverse opponents, such as affected industries, state attorneys general, think tanks, and trade associations. This analysis focuses on whether the SEC complied with the strictures of the Administrative Procedure Act.

Proposal ...