There is new hope that the US Securities and Exchange Commission (SEC) will issue its long-awaited climate disclosure rule soon. A draft of the final rule has been circulated to the SEC’s five commissioners, and a meeting to vote on the rule is expected by the end of March.

Readers of this newsletter have been watching this policy for nearly two years now and are rightly skeptical that the rule will be finalized soon, and candidly, it’s not yet clear this will happen in March. Also, there is no reliable information about the final requirements of the rule.

One thing that is certain is that the rule will be litigated, similar to the litigation delaying California’s climate disclosure laws. Assuming the case is heard by the US Supreme Court, it could be affected by the decision in a case challenging a legal doctrine, known as Chevron deference, that gives federal agencies substantial latitude to decide how to interpret the power Congress gave them. Court watchers predict this doctrine will be overturned, potentially upending more than 40 years of US federal policy, including this new policy.

The SEC is well aware of these trends and, as we reported, Chair Gary Gensler said possible lawsuits challenging the agency’s proposed climate disclosure rule would be “part of our democracy,” adding that the SEC is working to craft a rule that holds up to judicial scrutiny.

This Smart Read article is contributed by Tim Mohin, Global Sustainability Leader, BCG. Every week ESG News delivers smart commentary from ESG practitioners and experts to unpack issues of the week. Submit your ESG Smart Read to [email protected]