Sierra Club sues SEC over climate disclosure rule

The environmental advocacy group Sierra Club has filed a lawsuit against the Securities and Exchange Commission (SEC), arguing that the agency's new rule does not give investors the full truth about a company's climate risks.

Sierra Club and Sierra Club Foundation, represented by Earthjustice, The lawsuit was filed Wednesday, joining a growing list of states that have filed challenges to the rule.

The relevant rule requires publicly traded companies to disclose certain risks that climate change poses to their businesses. It also requires large and medium-sized companies to disclose how much carbon dioxide their operations emit.

While nearly 20 states have opposed the SEC rule, arguing that it creates undue burdens for companies to disclose information they may want to keep confidential, the Sierra Club said consumers deserve to know the climate impact of companies in which they invest.

“These investors cannot adequately manage their investments without complete information on the exposure of publicly traded companies to climate-related risks, including their greenhouse gas emissions profiles,” the statement said. “By allowing companies to selectively report their emissions, the SEC has failed to fulfill its statutory mandate to protect investors, maintain fair, orderly, and efficient markets, and promote capital information.”

The organizations assert the SEC's legal authority to require climate-based disclosures and call on the agency to “fulfill its obligation to protect investors.”

Hannah Vizcarra, senior attorney at Earthjustice, He said in a statement The SEC rule fails to require companies to show investors the full climate risks they pose.

“While it has the legal authority to issue the rule, the SEC has caved to industry pressure and finalized a rule that opens investors to greenwashing and rapidly expanding disclosure gaps,” Vizcarra said.

The SEC rule was finalized last week. Since then, several states have filed lawsuits arguing that the mandate imposes “expensive red tape on businesses” and will “destroy” supply chains.

While states argue the rule goes too far, the Sierra Club said it doesn't go far enough, especially after the Securities and Exchange Commission dropped proposed requirements for some companies to report emissions that come from using their products, such as oil companies reporting emissions from… About using their products. By burning fuel to power cars across the country.

“Through legal action, we hope to ensure that all investors, including the Sierra Club and its members, have the information they need to assess the climate-related risks faced by companies, make smart investment decisions, and protect their assets for decades to come.” Ben Jealous, executive director of the Sierra Club, said in a statement.

“The Commission is a rulemaker consistent with its authorities and laws governing the administrative process, and will vigorously defend the final climate risk disclosure rules in court,” an SEC spokesperson said in an email statement.

The story was updated at 8:15 p.m