A federal appeals court has temporarily halted the implementation of the Biden administration's rule requiring corporate emissions disclosure, according to court documents filed on Friday.

The U.S. Court of Appeals for the Fifth Circuit granted a request from Liberty Energy for an administrative stay against the Securities and Exchange Commission's (SEC) regulation.

Federal Court Halts Biden Admin’s Corporate Emissions Disclosure Rule https://t.co/oMsOGZB2Xi

— Daily Caller (@DailyCaller) March 16, 2024

The regulation

This regulation mandates medium-sized and large public corporations to disclose climate change-related risks and emissions data in their financial reports.

Liberty Energy, a company specializing in fracking, sought to pause the policy's enforcement while its legal challenge progresses through the judicial system, as reported by Bloomberg. The judges who approved the stay did not provide specific reasons for their decision in the court order.

"The decision was the first major ruling, and setback, for the Securities and Exchange Commission in the litigation over the regulations that require companies to report their greenhouse gas emissions and make other climate-related disclosures," Bloomberg reported.

Other legal issues

In a separate legal action, a coalition of Republican state attorneys general initiated a challenge against the SEC's policy on March 6, shortly after the agency announced the final rule.

Additionally, environmental advocacy groups such as the Sierra Club and Earthjustice have filed lawsuits against the SEC, arguing that the disclosure requirements are insufficient.

Compared to the SEC's initial proposal in March 2022, the finalized rule is less comprehensive, omitting provisions that would have compelled companies to track and disclose emissions associated with the end use of their products and services.

A legal victory

Will Hild, the executive director of Consumers' Research, hailed the court's decision as a victory for consumers, labeling the rule as an overreach by the SEC. He expressed hope that the courts would ultimately invalidate the policy, criticizing it for deviating from the SEC's statutory mandate.

"Today's ruling is a fantastic and expected win for consumers. This rule is the largest power grab in SEC history," Hild told the Daily Caller News Foundation after the Fifth Circuit granted the stay. "It's illegitimate, mocks their statutory purpose, and hopefully will be fully annulled by the courts in coming days."

The decision to pause the rule's implementation comes amidst ongoing legal challenges and debates surrounding the extent of corporate responsibility regarding emissions disclosure.

As the legal proceedings unfold, stakeholders continue to closely monitor developments that could have significant implications for environmental regulations and corporate transparency requirements.