for Public Companies Pending Judicial Review
On April 4, 2024, the Securities and Exchange Commission (“SEC”) issued an order (the “Stay Order”) staying its climate-related disclosure rules for public companies (the “Final Rules”) “pending the completion of judicial review” of the petitions challenging the Final Rules filed in six different circuit courts,1 which have been consolidated for review by the U.S. Court of Appeals for the Eighth Circuit. Among other reasons, the SEC noted that a stay “will facilitate the orderly judicial resolution of those challenges and allow the court of appeals to focus on deciding the merits” and “avoids potential regulatory uncertainty if registrants were to become subject to the Final Rules’ requirements during the pendency of the challenges to their validity.”2 The SEC further stated that, in issuing the Stay Order, it “is not departing from its view that the Final Rules are [. . .] within the [SEC’s] long-standing authority” and “will continue vigorously defending the Final Rules’ validity in court.”3
The SEC adopted the Final Rules on March 6, 2024. The Final Rules, if effective, would significantly expand the climate-related information that U.S. public companies and foreign private issuers (other than Canadian issuers reporting on Form 40-F) would be required to disclose in their periodic reports and registration statements.4
Shortly after the SEC adopted the Final Rules, two energy companies, several energy trade associations, groups of state attorneys general and the U.S. Chamber of Commerce, as well as climate advocacy groups, filed petitions to review the rules in the Second, Fifth, Sixth, Eighth, Eleventh and District of Columbia Circuits. On March 15, 2024, the U.S. Court of Appeals for the Fifth Circuit granted one group of petitioners’ motion for an administrative stay of the Final Rules, temporarily halting their implementation. On March 21, 2024, the day after the Judicial Panel on Multidistrict Litigation issued an order consolidating the petitions in the Eighth Circuit, the Fifth Circuit ordered the dissolution of its administrative stay in connection with the transfer of the petitions before it to the Eighth Circuit.
