SEC Goalposts on Climate Disclosure Regulation Slide Into 2024

The SEC is increasingly expected to issue requirements for companies to report on their greenhouse gas emissions and other climate matters early next year, as prospects for a 2023 release dim.

The Securities and Exchange Commission announced Wednesday it will meet Dec. 13 to consider Treasury market rules and the Public Company Accounting Oversight Board’s budget, but the climate rules were absent from the agenda. The climate regulations will almost certainly receive a public vote and the commission under Chair Gary Gensler usually holds public votes once a month. Gensler never has held more than one open meeting to consider rules in December.

The meeting announcement came the same day the Biden administration released rulemaking agendas for the SEC and other agencies, with the commission targeting April 2024 for the climate rules’ finalization. The SEC most recently aimed for October 2023, though Gensler has repeatedly declined to give a timeline, including in comments Thursday.

“You have to keep watching for those notices for open commission meetings,” Gensler said in response to a question from Bloomberg Law.

Asked whether April 2024 had any significance, Gensler added: “My eldest daughter’s birthday’s in April.”

Facing Pushback

The climate rules are poised to become Gensler’s marquee regulation. But they’ve faced significant pushback from companies, Republicans and some Democrats since the SEC proposed them in March 2022.

Business interests and Republican state attorneys general have threatened legal action if the agency moves ahead.

The US Chamber of Commerce, West Virginia Attorney General Patrick Morrisey (R) and others have been particularly troubled by the SEC’s plans to require big companies to report emissions from their supply chains and other indirect sources. Democratic Sens. Jon Tester of Montana and Joe Manchin of West Virginia also have raised concerns about the Scope 3 emissions.

Gensler has declined to discuss how the SEC may change its plans, but has said he’s heard the pushback “loud and clear.”

The SEC and other agencies have until early-to-mid 2024 to adopt rules and avoid the possibility of easily losing them in early 2025. A Republican-controlled House and Senate in the next Congress could quickly revoke regulations issued after the first few months or so of 2024 under the Congressional Review Act, unless the president stops them with a veto.

The exact timing of when the Congressional Review Act will come into play is unclear because it is based on the number of legislative days Congress will be in session. But if the act is imposed, it’s expected to affect rules issued as early as April.