New SEC Court Filing On Climate Rules

Ask people whose homes and businesses were wiped out by tornadoes, Hurricane Beryl, or even Hurricane Harvey a few years ago, if climate has a financial impact. Or, ask FEMA, the Federal Emergency Management Agency, and insurance companies trying to help those victims recoup some of their financial losses and rebuild.

NOAA, the National Oceanic and Atmospheric Administration, that tracks these issues reports that from 2021-2023 alone, there were 66 extreme weather events that each cost over $1 billion, costing $441.4 billion and 1490 lives, and so far in 2024, there have been 19 $1Billion weather events costing 149 lives. Since 1980 these $1Billion weather events have cost $2.7 trillion. (Project 2025, the Republican playbook for a second Trump administration, should he be re-elected, wants to dismantle NOAA.)

Despite these obvious financial impacts, 25 Republican Attorneys General and a group of Republican-affiliated think tanks and companies sued the SEC to stop its climate risk disclosure rules from taking effect. The Securities and Exchange Commission (SEC) has paused implementation of the rules pending resolution of these lawsuits, which have been consolidated.

“Climate risk is financial risk”

“The climate emergency is urgent and climate risk is financial risk. And the SEC is all about the protection of investors and the financial markets,” Kristina Wyatt, who oversaw the SEC task force that developed the rules proposed in 2022, told me in an exclusive interview on Electric Ladies Podcast when they were proposed. Wyatt is now Deputy General Counsel and Chief Sustainability Officer of Persefoni. Those rules attracted about 16,000 public comments.

Saying it was “this looming financial risk, that’s not being adequately addressed,” Wyatt emphasized that investors were clamoring for comparable, reliable and consistent data on the financial impacts of climate change on the companies they are considering for investment. Those companies that had property damage or worse in those hurricanes will have more costs, less cashflow and lower profits, for example. “Investors were saying, look, the information that we’re getting just doesn’t cut it, it’s not sufficiently clear, consistent, comparable, reliable. We need more and we need the SEC to step in and provide clearer guidance, clearer rules to help ensure that investors are getting the information that they need.” The SEC received about 16,000 public comments in response to those proposed rules.