‘DEI activism’: Republican AGs praise Trump SEC move to reverse Biden climate rule they fought in court

A Shift in Climate Policy: The SEC’s Decision to Roll Back Biden-Era Rule

In a significant move, the Trump administration’s U.S. Securities and Exchange Commission (SEC) has decided to roll back a climate rule introduced during the Biden era. This rule required publicly traded companies to disclose their carbon emissions and climate-related risks. The decision, praised by several state attorneys general, including Patrick Morrisey of West Virginia, marks a shift towards what many see as a more balanced approach to federal regulation.

The Legal Challenge Against the Climate Rule

The rollback comes after a series of legal challenges, notably a lawsuit led by Attorney General Patrick Morrisey, who was joined by over a dozen states. The lawsuit argued that the rule was both illegal and imposed undue burdens on businesses. The swift legal action, with over nine petitions filed within ten days of the rule’s passage, underscores the strong opposition from various quarters, including companies like Liberty Energy and Nomad Proppant Services.

Internal Conflicts Within the SEC

The SEC’s acting chairman, Mark Uyeda, labeled the rule as "deeply flawed," asserting that it exceeded the SEC’s regulatory authority and posed risks to the economy. However, not all commissioners agreed. Caroline Crenshaw opposed the delay, arguing that the SEC had acted within its bounds and that the change was politically driven. This internal conflict highlights the complex dynamics within the SEC as it navigates its regulatory responsibilities amidst shifting political landscapes.

The Broader Agenda of the Trump Administration

The SEC’s decision aligns with the Trump administration’s broader agenda to reverse many of Biden’s climate policies. This includes withdrawing from the Paris Agreement, signaling a return to traditional energy sources. The administration emphasizes a focus on merit and innovation over environmental and social governance (ESG) considerations, reflecting a pro-energy stance aimed at fostering economic growth and reducing regulatory burdens.

Reactions from Republican State Attorneys General

Republican attorneys general, such as Chris Carr of Georgia and Todd Rokita of Indiana, have welcomed the SEC’s move, viewing it as a victory for common sense and a reduction in unnecessary financial burdens on businesses. They argue that the original rule would have led to job losses and hindered investment, criticising it as an overreach driven by ideological agendas.

The White House’s Perspective

The White House has expressed strong support for the SEC’s decision, with spokesman Kush Desai highlighting the administration’s commitment to dismantling what it sees as ideological constraints on American institutions. The focus, according to Desai, is on prioritising competence and innovation over activism, reflecting a broader strategy to unleash America’s economic potential by reducing regulatory encumbrances.

This decision marks a pivotal moment in the ongoing debate over climate policy and regulatory oversight, with significant implications for businesses, investors, and the broader economy.