SEC official Uyeda considers future of criticized climate rule
Securities and Exchange Commission (SEC) acting Chair Mark Uyeda recently announced the agency’s plans to scale back a controversial climate-risk reporting rule that has faced challenges in court from Republicans and business organizations.
In a statement released on Tuesday, Uyeda stated that he has instructed staff to request a delay in scheduling oral arguments in the court case to allow the Commission time to deliberate and determine the best course of action. He expressed concerns about the rule, referring to it as “deeply flawed,” and potentially harmful to the capital markets and economy.
Uyeda highlighted discrepancies between his views and the Commission’s stance as reflected in previous court briefs. While the briefs defended the adoption of the rule, Uyeda remains skeptical about the statutory authority of the Commission to implement such a rule, the necessity of the rule, and the thorough assessment of its costs and benefits.
By seeking a postponement on the court case, Uyeda’s SEC signals the beginning of a rollback on one of the key initiatives undertaken by former SEC Chair Gary Gensler. Since the election of President Donald Trump, there has been speculation about the dismantling of Gensler’s regulatory efforts, including those related to cryptocurrency markets and climate change.
The decision to step back from the climate-risk reporting rule reflects a broader trend in Washington towards reevaluating and potentially reversing regulatory actions from the previous administration. The shift in regulatory priorities has implications not only for the financial sector but also for other policy areas where regulatory changes were initiated in recent years.
While the specifics of the SEC’s future actions regarding the climate rule remain uncertain, Uyeda’s stance suggests a shift towards a more conservative approach to regulatory oversight. This change in direction could have far-reaching consequences for how the financial industry addresses environmental and social risks in the coming years.
As the SEC navigates this evolving landscape, stakeholders in the financial industry and beyond will be closely monitoring developments to understand the implications for reporting requirements, risk management practices, and the broader regulatory environment. The regulatory direction taken by the SEC under Uyeda’s leadership is likely to shape the industry’s response to climate-related risks and sustainability issues for the foreseeable future.
