As the Securities and Exchange Commission (SEC) continues to trudge on with their unwavering attempts to implement their proposed climate disclosure rule, experts are weighing in on the legal challenges that the rule will probably face in its final stages of review.

On Monday, June 19th, George Mason University Law Professor Donald Kochan authored a legal analysis in the Harvard Law School Forum on Corporate Governance highlighting the specific legal vulnerabilities the SEC could encounter in the coming months. Professor Kochan underscored the continued overstep by the SEC’s proposed rule, which will likely face legal challenges under the “major questions doctrine” and the “non-delegation doctrine.”

The “major questions doctrine” ensures that Congress does not delegate power for issues of major significance to executive agencies. As the proposed climate disclosure rule currently stands, Congress has never permitted the SEC to take matters into its own hands and attempt to implement a rule outside of their statutory authority.

Kochan also calls attention to the “non-delegation doctrine,” another legal vulnerability for the SEC. The “non-delegation doctrine” works in conjunction with the “major questions doctrine.” The former doctrine determines whether Congress delegated appropriate authority to an agency to carry out a certain regulation and whether Congress went too far when giving this delegation.

It is clear that the SEC should withdraw its proposed rule under the premise that it violates multiple legal doctrines. The rule is also bound to face a plethora of legal challenges as the Commission jumps through regulatory hoops in hopes of its passage.

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