
Can Shareholder Lawsuits Police Companies’ Climate Disclosures?
In March 2022, the SEC proposed mandatory climate disclosures for public companies.[1] While climate activist investors applauded the proposed rules, opponents lamented their scope and cost, arguing that the SEC lacks the authority to promulgate such rules. But the debate largely overlooked a key point: The success of a climate disclosure regime – mandatory or voluntary – rests on accuracy of the disclosure. By some accounts, the private right of action is the most effective way to prevent companies from providing misleading information to their shareholders. The SEC lacks the resources and, in a controversial area like climate, may … Read more