Earlier this month, the SEC announced it would pause the implementation of its controversial climate disclosure rule due to the legal challenges that stemmed from its announcement. After years of buildup, the Commission had unveiled its finalized ruled on March 6th. However, the rule immediately faced legal challenges denouncing the Commission’s regulatory overreach.

While the pause is welcomed by businesses, investors, and the economy at large, that is not enough. The SEC should take the next step and scrap the rule altogether.

Since its proposal, the rule has been met with continuous criticism over its onerous and practically impossible disclosure requirements, which are poised to throw a wrench into companies’ operations with bloated compliance costs and regulatory uncertainty. Requiring companies to accurately track both direct emissions and indirect emissions will be an expensive enterprise that could be filled with legal risk due to the ambiguous nature of what constitutes an indirect emission.

The SEC should take the hint from the public’s outcry and legal challenges and realize that the rule will do more harm than good. It is time to scrap, not pause, this climate disclosure rule. The SEC should instead focus in its core mission of protecting investors and ensuring fair and efficient markets.

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