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National Center for Public Policy Research v. SEC

The Securities and Exchange Commission has issued new rules that would require public companies to disclose their climate-related business risks and mitigation procedures. The agency exceeded its statutory authority by making these intrusive rules, which run roughshod over core constitutional rights. Representing the National Center for Public Policy Research, NCLA demands an immediate end to this illegal SEC pursuit of climate activism at the cost of civil liberties.

The SEC rules would force public companies to reveal a broad swath of climate-related risks and their associated impacts, including potential “changes in law or policy,” “reduced market demand for carbon-intensive products,” and “litigation defense costs.” In other words, the government is trying to require companies to guess how the government will regulate in the future, how consumers will respond to hypothetical government regulations, and how courts will rule with respect to those theoretical regulations. One rule would also mandate that companies disclose greenhouse-gas emissions from their operations and the energy they consume, even if such emissions are untethered to a traditional understanding of financial materiality.

SEC only has authority to protect investors and foster fair markets in securities transactions. It does not have plenary power to regulate the economy, and certainly not the environment, through climate-focused rulemaking. To make matters worse, the rules violate the First Amendment, which limits compelled disclosures to “purely factual and uncontroversial information.” SEC has stayed implementation of the unlawful rules pending the resolution of multiple legal challenges.

Sheng Li
Litigation Counsel
Andrew Morris
Senior Litigation Counsel

Petition for Review and Motion for Transfer

April 29, 2024 | Read More


NCLA Asks Appeals Court to Stop SEC’s Unconstitutional New Climate Disclosure Rules

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