SEC climate rule leaves a lot up to companies

investmentnews.com:

One thing that opponents and supporters of the SEC climate rule have agreed on is that there was compromise in the final version passed Wednesday. But for those against it, there clearly wasn’t enough. And champions of the rule were left with something that they say is barely a step forward, nowhere near sufficient to address the major issues presented by climate change that affect public companies’ finances.

Further, the requirements don’t mesh with more stringent reporting regimes, such as in the European Union and a forthcoming requirement in California, complicating things for companies with business there.

“It’s a baby step, and there’s a lot of work that needs to be done,” said former SEC commissioner Allison Herren Lee, who supported the proposed version of the rule before leaving the agency.

“It remains to be seen whether this rule is better than nothing, but nothing is a very low bar,” Lee said during a press conference following the vote.

It’s also all but guaranteed that there will be a legal challenge to the rule, even though many of the cuts the regulator made to its proposal appear to have been made to help it withstand litigation, lawyers said.

The Securities and Exchange Commission passed the final version of its rule on a party-line vote, with commissioners Hester Peirce and Mark Uyeda dissenting and commissioners Caroline Crenshaw and Jaime Lizárraga and chair Gary Gensler consenting.

Unlike the proposed version of the rule, which won favor among environmental groups and sustainable investors but displeased conservatives, the final one did not include a requirement for large public companies to report Scope 3 emissions, which account for the majority of greenhouse gases. It also severely walked back