A coalition of red states announced Wednesday that they are challenging the Biden administration over its fresh corporate emissions and climate disclosure rule, just hours after the Securities and Exchange Commission (SEC) greenlit the measure.
The SEC moved Wednesday to finalize new rules legally requiring certain public companies to report climate-related risks to their businesses and disclose data on the greenhouse gas emissions that their business operations directly generate. A group of ten Republican state attorneys general are suing the Biden administration over the rule, arguing that it is an unconstitutional attempt to impose climate regulation through the back door using an agency that does not have much to do with climate-related rulemaking. (RELATED: Green Firm That Advised SEC On Proposed Emissions Rule Sold Carbon Credits From Chinese Region Known For Slave Labor)
The challenge was filed in the U.S. Court of Appeals for the 11th Circuit, and is being co-led by Georgia Attorney General Christopher Carr and West Virginia Attorney General Patrick Morrissey. The attorneys general for Alabama, Alaska, Indiana, Oklahoma, South Carolina, Wyoming and Virginia are also involved in the suit.
The WV AG briefed the media today on a development involving the U.S. Securities and Exchange Commission. The AG is co-leading a coalition of 10 states in filing a petition for review in the U.S. Court Of Appeals for the 11th Circuit.
View playback: https://t.co/MF8Hwrk0aq
1/2 pic.twitter.com/r09DyeIh9u— WV Attorney General (@WestVirginiaAG) March 6, 2024
“While the administration and the SEC have made some changes to the proposed rule, what they have released today is still wildly in defect and illegal and unconstitutional, and that’s why we are taking the action that we are taking today,” Morrissey said during remarks announcing the suit. “We believe that we are going to proceed in court and prevail. Today, the Biden administration has once again gone on the attack against America’s energy industry. It actually may be one of their most egregious attempts yet, but this time, they’re not using the [Environmental Protection Agency] as their tool of choice.”
The final rule approved Wednesday is a weakened version of the SEC’s March 2022 proposal. Nevertheless, many opponents contend that it is still illegal or needlessly onerous, or both, while some critics from the left have criticized the SEC for dropping some of the most aggressive provisions included in the proposal.
The final rule mandates medium-sized and large companies to report emissions attributable to the electricity they use to power their business operations starting in fiscal years 2026 and 2028, respectively. The regulation will also require all public corporations to disclose climate-related risks to their business, just as they are required to disclose other material risks.
The rule also requires relevant companies to report their organizational climate goals, such as plans to ditch fossil fuels. The agency opted to make these requirements legally binding, meaning that corporations could be exposed to legal liability if they misreport their emissions.
The agency dropped a provision in the initial proposal that would have required certain public corporations to disclose the indirect emissions caused by their businesses, including those generated along supply chains and by the use of final products.
“The Commission undertakes rulemaking consistent with its authorities and laws governing the administrative process and will vigorously defend the final climate risk disclosure rules in court,” a spokesperson for the SEC told the Daily Caller News Foundation.
Editor’s note: This article has been updated to include comment from the SEC.
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