The SEC wants to ignore climate risks. They’re not going away

The top US financial regulator wants to let one of its signature accomplishments of recent years die on the vine. The move’s immediate practical impact is limited, but its symbolic resonance is significant.

Mark Uyeda, acting chair of the Securities and Exchange Commission, said the agency will drop its legal defense of rules it adopted in the last months of Joe Biden’s presidency that requires many companies to publish information about their emissions and exposure to climate risk. The rules are embroiled in lawsuits brought by 25 Republican state attorneys general and lobbying groups, who argued they overstepped the SEC’s authority.

The agency’s withdrawal of support for the rules doesn’t guarantee their demise; a federal court is expected to rule on the lawsuits this year, and if it upholds them, the SEC would need to go through a lengthy bureaucratic process to dismantle them. And in practice, the SEC’s decision changes little, since the rules had not yet taken effect.

But it deepens the rift between the investors who see climate change as a major threat to their returns, and those who see climate disclosure as a scheme to unfairly punish fossil fuel companies.