USA climate disclosure rules on hold for now

Just last month we shared that the Securities and Exchange Commission (SEC) in the United States (USA) had adopted final rules to require climate disclosures in registration statements and annual reports, without Scope 3 emissions.

Since then, petitions were filed seeking a judicial review of the rules and the SEC has now stayed (paused) the rules pending judicial review. The SEC indicated that it has decided to exercise its discretion to stay the final rules pending the completion of judicial review in the US Court of Appeals for the Eighth Circuit. The SEC further noted that it is not departing from its view that the rules are consistent with applicable law. The SEC stated that a Commission stay will facilitate the orderly judicial resolution of the legal challenges and allow the court of appeals to focus on deciding the merits. The SEC’s order issuing the stay may be accessed here.

What does this mean for climate reporting by US registrants?

Despite the stay of the SEC’s climate reporting rules, certain US entities may nevertheless be required to provide climate disclosures.

While the SEC rules apply only to registrants, states such as California and Illinois have approved legislation for climate reporting by larger entities. This includes public and private entities, and foreign entities with US-based subsidiaries, doing business in those states. Meanwhile, New York State has proposed draft climate reporting legislation that resembles the Californian requirements.

So, while climate reporting for registrants operating in states other than California and Illinois may be on pause, not all US companies are off the hook.

How BDO can help

If your organisation operates in the USA, our sustainability reporting experts can help you to understand how this might be important for your sustainability reporting efforts.