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States Challenge SEC’s ‘Unlawful’ Climate Rules, Daily Journal


Partners Erin Martin and Celia Soehner are quoted in a Daily Journal article about the US Securities and Exchange Commission’s (SEC’s) final climate disclosure rule, which differed from the SEC’s initial proposal that faced much pushback.

Erin noted the similarity between the SEC’s decision on the climate proposal and its handling of cybersecurity regulation.

“The final rules are less prescriptive than what originally was contemplated by the SEC, and are reminiscent of how the SEC ultimately addressed cyber-related risk management in the recently finalized SEC cybersecurity disclosure rules,” Erin said. “As with the cyber rules, we saw the SEC back away from mandated specific board expertise on climate-related risks.”

Whether the rules will bring clarity to emissions reporting requirements, according to Celia, is likely to come down to whether courts uphold California’s climate-related disclosure legislation.

“The final SEC rules certainly continue to highlight lack of comparability among different regulatory regimes,” she said. “Assuming that the California legislation is upheld and survives the current legal challenges, large companies doing business in California will still need to comply with the Scope 3 disclosure requirements at the state level.”

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