On the same day that the SEC issued its long-awaited rule on climate disclosures, ten states (West Virginia, Georgia, Alabama, Alaska, Indiana, New Hampshire, Oklahoma, South Carolina, Virginia, and Wyoming, which are all governed by Republicans) filed a petition for review in the Eleventh Circuit challenging the SEC's climate disclosure rule. Specifically, these states argue that “the final rule exceeds the agency's statutory authority and otherwise is arbitrary, capricious, an abuse of discretion, and not in accordance with law.”

This challenge to the SEC climate disclosure rule is expected and has long been telegraphed by a coalition of conservative states, which had previously filed comments objecting to the SEC's draft climate disclosure rule in 2022. Even though the SEC has removed some of the most contentious elements of the climate disclosure rule--e.g., companies are no longer required to disclose Scope 3 greenhouse gas emissions--these adjustments have been deemed insufficient by the states challenging the climate disclosure rule. As West Virginia Attorney General Morrissey stated, “while the administration and the SEC made some changes to the proposed rule, what they've released today is still lively in defect and illegal and unconstitutional.”

Although this challenge to the SEC climate disclosure rule is led by conservatives, it is altogether possible that environmental groups may soon likewise challenge the law. The Sierra Club and Earthjustice have issued a statement that they “are considering challenging the SEC's arbitrary removal of key provisions from the final rule”--e.g., objecting to the SEC's climate disclosure rule as not going far enough. 

Ultimately, the courts--and likely the U.S. Supreme Court--will determine whether the SEC climate disclosure rule will remain on the books.