In Pensions & Investments, George Raine and Michael Littenberg Share Insight on SEC Climate Disclosure Rule

The Securities and Exchange Commission has issued dozens of rule proposals under the helm of Chairman Gary Gensler, but stakeholders are particularly focused on the most talked about and consequential proposal — its climate disclosure rule for public companies. 

Partner and global ESG, CSR and business and human rights practice head Michael Littenberg, told Pensions & Investments that "it's arguably the most significant rule-making initiative by the SEC for public companies in a generation." 

“There's also a ‘100%’ chance that rule-making initiative will get challenged in court,” Michael added. "The final rules will face a legal challenge even if they are significantly watered down," he said. "I think it's not so much the degree of 'are the rules extensive or less extensive' as to whether they face a challenge, I think the determinant is going to be whether you have rules in this area or don't have any rules." 

George Raine, partner in Ropes & Gray’s asset management practice, told the publication that managers “who are looking for sustainable investments and climate-related investing are hungry for data and information." 

On the whole, asset managers supported the proposal in comment letters, but many offered suggested changes in a final rule. The SEC's regulatory agenda calls for the publication of a final rule in October, but with the massive volume of comments received and delicate nature of the rule-making, sources expect a final rule in early 2023.