California defends SEC climate rules amid similar litigation

The US state of California filed a lawsuit on Thursday seeking to save the emissions reporting regulations of the US Securities and Exchange Commission (SEC). The state is currently fighting another lawsuit against its own disclosure requirements for companies on climate change.

Rob Bonta, a Democrat from California, was the last attorney general from 46 states to officially comment on nine lawsuits challenging Securities and Exchange Commission (SEC) rules passed in March that require companies to report their greenhouse gas emissions and make other climate-related disclosures.

Pennsylvania, New Jersey, North Carolina and Maine, all of which have Democratic attorneys general, were the only states that did not file an amicus curiae brief or intervene in the litigation before the U.S. Court of Appeals for the Eighth Circuit; all states with Republican attorneys general are participating in the proceedings.

The attorneys general's extensive involvement shows how partisan climate risk disclosure has become as leaders from both major political parties clash over environmental, social and governance issues. The agency, under Democratic Chairman Gary Gensler, suspended the regulations in April during the litigation.

Bonta led a group of 20 Democratic attorneys general in urging the SEC to adopt climate disclosure rules in a 2022 letter, after he led a similar initiative in 2021. The calls came before California Gov. Gavin Newsom (D) signed two corporate emissions reporting laws late last year that will apply to large companies in the state.

California was sued over these laws earlier this year by the U.S. Chamber of Commerce, which is also challenging the SEC's regulations in court.

The SEC's requirements are necessary so that investors in California and elsewhere can adequately assess the risks companies face from extreme weather and other impacts of climate change, Bonta said Thursday in a sealed amicus curiae brief reviewed by Bloomberg Law. The filing in the Eighth Circuit is scheduled to be made public later Friday.

“As these climate-related changes escalate, their impact on companies will only intensify,” Bonta said. “Climate-related disclosures will help investors make informed decisions to protect their investments in the face of this reality.”

The lead case is Iowa v. SEC, 8th Circuit, No. 24-1522, amicus curiae brief filed 8/15/24.