Proposed SEC Climate Disclosure Rule Potentially Delayed Until Fall 2023

About two weeks ago, former SEC Commissioner Robert Jackson, currently a professor at NYU Law, stated during an April 27 webinar hosted by a carbon accounting firm that "it looks like the [climate disclosure] rule is going to be pushed back a little further than many had thought . . . . It [now] looks more like the fall of this year [2023]."  If true, such a delay would mean that, at minimum, the proposed climate disclosures would not come into effect until 2024--and any such disclosures would likely be subject to legal challenge, which could delay their implementation even further.

Such a delay would be unsurprising.  Although the SEC's proposed climate disclosures have been a policy priority for the Biden Administration since its inception, the process for promulgating this rule has been subject to numerous delays.  For example, even though the SEC identified it as a policy priority within the first few weeks of the Biden Presidency, and targeted October 2021 to publish a draft rule, this selfsame draft rule was not published until March 2022, and only after a number of prominent politicians, including Senator Warren (D-MA), had questioned the SEC about its lack of action.  Similarly, the draft rule was intended to be finalized by December 2022 (as indicated by the draft rule itself), but it was then reported that the SEC was instead targeting the second quarter of 2023.  And now, in the second quarter of 2023, there are the current reports of an additional delay until fall 2023.  

Based upon the complexity and far-reaching scope of the rule, such delays are not altogether surprising.  The SEC is seeking an immense amount of information in an area that had not previously been a focus for the agency.  The level of public engagement with this proposal is also noteworthy--the number of comments received by the SEC has exceeded that of all but a handful of other policy proposals (and many of these comments seek adjustments to the proposed climate disclosures).  However, the lack of certainty due to the failure of the SEC to publish the final climate disclosure rule is problematic for the regulated entities that need to develop procedures to conform to the SEC's regulations.