Amicus Brief: Iowa v. SEC

A coalition of nine states and the American Free Enterprise Chamber of Commerce are challenging the SEC’s new climate disclosure rule. They argue that the rule imposes unprecedented and burdensome requirements on public companies, diverting their focus from core financial performance to politically driven environmental metrics. More importantly from a legal perspective, the rule’s mandate for detailed disclosures on climate-related risks and greenhouse gas emissions, including qualitative assessments of climate policy impacts, exceeds the SEC’s traditional scope and could distort market behavior. As dissenting Commissioner Hester Peirce noted, the rule embodies “climate exceptionalism,” forcing companies to prioritize climate issues disproportionately over other critical business considerations.

The various challenges have now been consolidated for consideration by the U.S. Court of Appeals for the Eighth Circuit. Drawing on a comment submitted by Jim Copland and Bernard Sharfman during the rulemaking process, MI filed an amicus brief that focuses on the importance of a depoliticized SEC, moored to its traditional role and emphasizing the importance of focusing on material financial information for investors. We highlight how the new climate rule violates both federalism and the separation of powers, stepping on traditional areas of state regulatory authority and acting like the EPA rather than a financial regulator.

James R. Copland is a senior fellow at the Manhattan Institute and director of Legal Policy.

Ilya Shapiro is a senior fellow and director of Constitutional Studies at the Manhattan Institute. Follow him on Twitter here.

Tim Rosenberger is a legal fellow at the Manhattan Institute.

Special thanks to law school associate Dennis Wieboldt.

Photo by SAUL LOEB/AFP via Getty Images