TheCorporateCounsel.net

Last week, Meredith discussed the lawsuits filed by various Red State AGs seeking to invalidate the SEC’s climate disclosure rules.  She also said that environmental groups like the Sierra Club were planning to launch challenges of their own, and sure enough, the Sierra Club filed a petition for review with the DC Circuit yesterday. As this excerpt from the Sierra Club’s press release announcing the filing explains, their problem with the rule is that it doesn’t go far enough:

The Sierra Club and the Sierra Club Foundation manage millions of dollars in investments for their respective organizations, including employee 401Ks. In addition, the Sierra Club represents millions of members and supporters, many of whom have significant investments of their own. These investors cannot adequately manage their investments without complete information on publicly-traded companies’ vulnerability to climate-related risks, including greenhouse gas emissions profiles. By allowing companies to selectively report their emissions, the SEC has fallen short of its statutory mandate to protect investors, maintain fair, orderly, and efficient markets, and promote capital formation.

The Sierra Club and Sierra Club Foundation affirm the SEC’s fundamental legal authority to require climate-based disclosures and call on the agency to fulfill its obligation to protect investors.

That last paragraph appeared in bold face in the original as well, and I think it’s interesting that the petitioners chose to emphasize that language. Perhaps they were trying to convince people (or even themselves) that a lawsuit like this doesn’t necessarily invite the DC Circuit to join some of its more conservative siblings in chipping away at the SEC’s authority.

On the other hand, maybe the Sierra Club’s action is a little more strategic – and shrewd – than it first appears. As this Vinson & Elkins memo points out, all of the various lawsuits challenging the rule will be consolidated into a single circuit court challenge based on a lottery system. So, while I’m sure the Sierra Club sincerely wants more demanding disclosure rules, one of its main objectives in filing may be to buy the regulator-friendly DC Circuit a ticket to that lottery.

– John Jenkins