Certain Members of Congress Urge SEC to Enforce Existing Climate Disclosure Rules During Litigation
Author: Destiny Aigbe
August 6, 2024
Introduction
Earlier this month, a group of 38 Congressional Democrats (10 Senators and 28 Representatives) sent a letter to SEC Chairman Gary Gensler, emphasizing the importance of enforcing existing climate disclosure rules and guidance. This letter arrives while the SEC's new climate disclosure rules are under litigation and a related stay. The lawmakers urge the SEC to maintain its focus on climate matters, highlighting a broader commitment to transparency and environmental accountability.
Key Requests to the SEC
The Congressional Democrats' letter included several pointed questions and requests for the SEC:
1. Enforcement During Litigation:
- Commitment to Existing Rules: Will the SEC commit to enforcing its existing climate-related rules and guidance while the final rule is stayed and pending judicial review?
- Reminder for Compliance: Will the SEC release a statement reminding registrants that covered U.S. companies subject to alternative climate reporting regimes, such as those in California, the EU, or the ISSB, must comply with those reporting regimes?
- Continuing Disclosure of Emissions: Will the SEC release a statement encouraging registrants already disclosing Scopes 1, 2, and 3 greenhouse gas emissions to continue doing so?
- Defense in Court: Will the SEC commit to using all available resources to defend the rule in court?
2. Guidance and Implementation Post-Litigation:
- Materiality Assessments: Assuming the climate disclosure rules survive litigation, will the SEC provide guidance to registrants on what constitutes “material” information and how to conduct and disclose materiality assessments under the climate risk disclosure rule?
- Recognition of Alternative Reporting Regimes: Will the SEC recognize alternative climate reporting regimes, providing registrants with more options to satisfy compliance? This includes considering regimes from California, the EU, and the ISSB.
- Enforcement and Implementation Resources: Will the SEC detail the resources it will devote to enforcing and implementing the rule?
- Staff Training and Preparation: Will the SEC outline its plan to prepare and train staff to effectively implement and enforce the rule?
Conclusion
This letter underscores the high priority that climate-related matters hold within the SEC's agenda. Regardless of the outcome of the ongoing litigation concerning the SEC's recently enacted climate disclosure rules, Congressional Democrats are pushing for robust enforcement and clear guidance. This focus aims to ensure that registrants continue to uphold transparency and accountability in their environmental impact disclosures.
Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. For specific guidance on SEC compliance and climate disclosure, please consult with a legal professional.
About the Author
Destiny Aigbe
Managing Partner
Aigbe Law PLLC | Dark Alpha Capital
A Corporate and Securities Law Firm
With a robust foundation in law and finance, Destiny Aigbe has carved a distinguished career, underpinned by his pivotal role in orchestrating and managing complex transactions that have propelled companies to significant growth and market prominence. As a seasoned attorney and strategic advisor, Destiny has been instrumental in facilitating over $75 million in capital raises, demonstrating a keen acumen for securing funding and fostering investor confidence.
Destiny's leadership in the execution of six successful public listings, through meticulously structured reverse mergers and registration statements, showcases his adeptness in navigating the intricacies of the public markets and his capacity to guide companies through transformative growth phases. His involvement in five mergers as an operator further illustrates his versatile skill set, extending beyond legal expertise to include hands-on management and operational strategy, though these ventures did not involve funding.
Destiny's professional journey is marked by a commitment to excellence and a diverse range of experiences, from representing a wide spectrum of clients including public and private companies, and investment firms, to holding significant roles within the US government. His tenure with the US Department of State and the National Institutes of Health highlights his adaptability and his contribution to the advancement of entrepreneurial ventures in sectors like biotechnology and nanotechnology through strategic funding initiatives.
An alumnus of Vanderbilt University Law School, Destiny focused on Finance and Mergers & Acquisitions, further honing his expertise with a certificate in Law and Business. His foundational education in Finance was obtained with honors from the University of Maryland's Robert H. Smith School of Business, which laid the groundwork for his subsequent achievements in investment banking and legal practice.
Residing in the Washington, D.C. area, Destiny Aigbe continues to leverage his extensive experience and insightful leadership to drive innovation, growth, and success for his clients and the ventures he is involved with.
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