In an unprecedented move, late on Thursday, the SEC decided to delay their own regulation while the legal dispute is resolved in order to “prevent any uncertainty in regulation.”
Meanwhile, Liberty Energy, a Denver-based fracking company, was the first company to sue the SEC and has emerged as the most vocal opponent of the climate regulation. CEO Chris Wright has litigated other environmental regulations in the past.
He is trying to establish a new stance: While acknowledging that the climate is warming and human activity is a cause, he argues that it is not a crisis and has been excessively publicized. This LinkedIn video—which was temporarily taken down for stating, “There is no climate crisis”—presents his perspectives.
Mr. Wright is seeking to block the SEC’s climate regulation due to excessive regulatory authority, asserting, “They’re overstepping their boundaries. Unfortunately, larger and more intrusive governments harm small startups and the dynamism of our marketplace. And I strongly oppose that.”
The SEC Climate Rule, completed on March 6 and immediately contested by Liberty, was put on hold by the 5th Circuit Court. Since then, nine lawsuits (7 against the regulation and 2 asserting it is too weak) have been filed, and two were combined in the 8th Circuit Court.
Notably, the suspension of the new rule's implementation was lifted when the cases were consolidated. Earlier in the week, the SEC fought to postpone the regulation, stating that Liberty “identified no imminent harm justifying such emergency relief” because the regulation does not require disclosures from Liberty Energy until 2026. Now, in a surprising change, the SEC decided to unilaterally pause the implementation of this regulation while the legal dispute is ongoing.
You are forgiven if you find this story confusing…it is. While no one knows the final outcome, suffice it to say, it’s an interesting and fast-moving story.
This Smart Read article is contributed by Tim Mohin, Global Sustainability Leader, BCG. Every week ESG News delivers smart commentary from ESG practitioners and experts to unpack issues of the week. Submit your ESG Smart Read to [email protected]
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