Climate Impact Rule Likely on the Ropes: SEC Roundup

Welcome to SEC Roundup, a bimonthly video series by former Securities and Exchange Commission senior trial counsels Nick Morgan and Tom Zaccaro, founders of the nonprofit advocacy group Investor Choice Advocates Network.

In this episode, Morgan and Zaccaro talk with former SEC Commissioner Paul Atkins, who’s now CEO of Patomak Global Partners in Washington, about the current status of the SEC’s proposed climate disclosure rule and how it might fare if challenged in litigation.

The 400-plus page March 2022 proposal “would require public companies to disclose detailed climate impact related information, but the SEC has recently signaled that any final rule is still months away, likely because of the more than 14,000 public comments received and threats of litigation from all sides on the issue,” Morgan and Zaccaro explain.

Atkins points to a significant flaw in the proposal: the failure to adequately consider whether investors consider the required disclosures material to investing decisions.

According to one analysis of the public comment letters, 70 asset managers and 50 institutional investors submitted comments, and one of the top five issues identified was the SEC’s legal authority to promulgate the rule, which Atkins discusses head on.