SEC Climate Rule Put on Hold

The U.S. 5th Circuit Court of Appeals delayed implementation of the rule, pending further review.



The U.S. 5th Circuit Court of Appeals issued on March 15 an administrative stay of the climate disclosure rule finalized on March 6 by the Securities and Exchange Commission. The order did not elaborate on the basis for the stay, and the court does not have additional hearings scheduled at this time.

The SEC’s “The Enhancement and Standardization of Climate-Related Disclosures for Investors” has a staggered compliance schedule slated to start in 2025. Public companies will have to disclose, in their reporting for 2025, the climate risks material to their business; the companies’ strategies for reducing those risks and related costs; the processes the companies use for managing and identifying climate risks; and any losses from severe weather events. Larger companies will also have to disclose their direct greenhouse gas emissions and emissions from their power consumption, known as Scope 1 and 2 emissions, respectively, starting in 2026.

The stay was granted in Liberty Energy v. SEC, brought by the states of Texas, Louisiana and Mississippi (those in which federal cases are appealed to the 5th Circuit), along with two fossil fuel companies, two fossil fuel industry groups and the business advocacy group U.S. Chamber of Commerce. The rule also faces two separate challenges from Republican-led states in the 8th Circuit (Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, South Dakota) and 11th Circuit (Alabama, Florida, Georgia).

The SEC argued that since the rule is not in effect—it goes into effect 60 days after it is published in the “Federal Register”—and no theoretical harm is imminent (no reporting will be required until March 2026 reporting for the 2025 year), it is premature to request an administrative stay. The regulator added that “the rules fit comfortably within the Commission’s long-standing authority to require the disclosure of information important to investors in making investment and voting decisions.”

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The rule was singled out by Republican members of the House Committee on Financial Services during a Monday field hearing on the rule in Lebanon, Tennessee. Representatives present at the hearing characterized the rule as unlawful overreach on the part of the SEC to appease left-wing climate activists.

Representative Bill Huizenga, R-Michigan, said the rule will “significantly hurt our economy while serving as a boon for special interest groups and far left activists.” Representative Andy Ogles, R-Tennessee, argued that the rule is part of the SEC’s “obsession with the climate change religion, and that is what’s become: a religion.”

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Mississippi PERS Opposes Bill to Change Board, Deny Employer Contribution Increase

Legislation passed by the Mississippi House of Representatives would flip the pension’s board from mostly elected by members to mostly appointed by government officials. 



The Public Employees’ Retirement System of Mississippi on Sunday announced its opposition to a bill in the state legislature that would eliminate an employer-contribution increase the board had approved and would also drastically change the make-up of the PERS Board of Trustees.
 

Currently, eight of PERS’ 10 board members are elected by members of the pension fund, joining the state treasurer and one PERS member appointed by the governor. The proposed legislation would reduce the number of elected officials to two out of 11. 

House Bill 1590, passed by the Mississippi House of Representatives on March 13, would increase the total number of board seats to 11. The number of board members directly appointed by the governor would increase to four from one, and the number of members appointed by the lieutenant governor would increase to three from zero. No qualifications are laid out in the bill for those seven appointments, in contrast to very specific qualifications laid out in the bill’s original text and for other appointments. In addition to the state treasurer, the 11th member would be the Mississippi Commissioner of Revenue, also appointed by the governor. 

The bill moved to the Mississippi Senate for consideration and was referred on March 14 to the state Senate’s Government Structure Committee, which was created in January and is in its first session. The state legislative session runs through early May.  

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The current governor of Mississippi is Tate Reeves, a Republican, who began serving in 2020 and was re-elected to a second term in November 2023. 

In a press release, PERS called the bill an attempt to politicize the PERS system. 

“This change would indirectly shift more power to politicians, in effect turning control over to the governor and lieutenant governor, especially since all appointments would be with advice and consent of the Senate,” the release stated.  

According to PERS, replacing the board with government appointees would result in a loss of institutional knowledge and continuity.  

Additionally, House Bill 1590 would undo the board’s plans to increase the pension employer contribution rate to 22.4% from 17.4%. “By rejecting the Board’s proposed rate increase, this approach not only would jeopardize the membership, it would also hurt all taxpayers,” the PERS release stated in response to the measure. “The longer the plan goes without proper funding, the more it costs and the harder it gets, leaving future citizens with the liability.”  

The pension system had a funded status of 56.1%, as of June 30, 2023. The fund has one-, three-, five- and 10-year annualized returns of 7.76%, 9.36%, 7.63% and 8.47%, respectively. 

PERS managed about $31.6 billion in assets, as of June 30, 2023. According to the release, 10% of Mississippi’s population are members or beneficiaries of PERS, representing 300,000 members.  

Related Stories: 

Charles Nielsen Is Appointed CIO of Mississippi PERS 

Mississippi Pension Sues Portland General Electric over Energy Trading Losses 

Mississippi PERS Names New CIO After Seven-Month Search 

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