In March, the SEC finalized a controversial rule requiring publicly traded companies to disclose any climate-related risks to their business. The SEC's Final Rules also required some midsize and large firms to reveal how much CO2 is emitted from their operations. This led to several Republican states, companies, and business groups filing lawsuits against the regulations, asking for the SEC rule to be stayed. Two energy companies—Liberty Energy Inc. and Nomad Proppant Services LLC—sought an administrative stay on the rule, which was granted by the Fifth Circuit court on March 15.

According to SEC rules, businesses must report on the potential impact climate risks may have on their financial condition as well as the strategies undertaken to mitigate such risks. Businesses have to disclose their climate targets and the losses suffered due to severe weather events.

Other legal challenges against the rule were filed at the Second, Sixth, Eighth, Eleventh, and D.C. Circuit courts. All the lawsuits, including the Fifth Circuit one, were consolidated into a single case, with the Eight Circuit set to hear the challenge.

On March 26, the Chamber of Commerce of the United States of America, the Texas Association of Business, and the Longview Chamber of Commerce filed a motion in the Eighth Circuit, seeking a stay of the SEC rules pending judicial review.

Challenging SEC

Lawsuits from Republican states claim that the SEC breached their rule-making authority by asking public firms to disclose climate risks while such regulations have not received approval from Congress.

SEC's rules create costly, unnecessary "red tape" for businesses. They accused the climate rules of being part of the Biden administration's push to make sure investment decisions in the country are driven by climate considerations rather than financial returns.