SEC Climate Regulation Rules Paused

Latham Watkins provides insight into recent developments regarding SEC climate regulation rules. In March, a three-judge panel of the Fifth Circuit Court of Appeals issued an administrative stay of these rules, following a petition citing concerns over compliance costs and constitutional issues.

Latham calls the litigation landscape concerning the SEC climate regulation rules “rapidly evolving,” with several legal challenges in process. These include petitions for review in the Eighth and Eleventh Circuits filed by attorneys general from 19 states and another petition to the Fifth Circuit from the US Chamber of Commerce.

The outcome of these challenges, potentially determined by an upcoming court lottery, could impact the fate of the stay. Other districts may rule differently. Either way, the Supreme Court will ultimately decide whether the regulation is stayed during the litigation.

Meanwhile, global developments, such as the European Council’s agreement on the Corporate Sustainability Due Diligence Directive, underscore the broader implications for US companies’ environmental policies, especially those operating within the EU’s jurisdiction.