Appeals court panel blocks SEC's climate disclosure requirement

A three-judge panel of the Fifth Circuit Court of Appeals on Friday blocked a requirement from the U.S. Securities and Exchange Commission (SEC) that would require firms to identify risks they face due to climate change.

The pause will remain in effect while a challenge from oil and gas firms Liberty Energy and Nomad Proppant Services proceeds, The Hill reported. The rule is part of a broader effort from the Biden administration to use the rulemaking authorities of federal agencies to address climate change, according to Reuters.

Both firms had argued that the rule would force companies to spend more than $4 billion to comply and also challenged the authority of the SEC to even issue the rule. The judges did not issue a reason for their decision to pause the order, however.

The rule has also met with scrutiny from environmental groups such as the Sierra Club, which sued the SEC this week claiming the rule would keep vital information from investors, per Politico.

"We are saying not only does the SEC have the authority to require these types of disclosures, in fact they made a mistake by dropping some very crucial disclosure requirements that were in the proposal — and a mistake that just is fundamentally wrong," Earthjustice senior attorney Hana Vizcarra said.

Ben Whedon is an editor and reporter for Just the News. Follow him on X, formerly Twitter.