Article by Gregory S. McNeal and Charlotte Runzel Lemos
The Securities and Exchange Commission (SEC) has taken on an increasingly proactive role in enforcing environmental, social, and governance (ESG) regulations, focusing on mandating climate-related disclosures. This Article explores the implications of the SEC's evolving regulatory landscape using the maritime industry as a case study in the challenges of accurate and standardized reporting. The challenging nature of environmental reporting, combined with the SEC's enhanced disclosure rules and the recent Supreme Court decision in Loper Bright Enterprises v. Raimondo makes for unsettled and heavily litigated territory. Loper Bright significantly narrows the Chevron deference doctrine, which previously allowed agencies like the SEC greater interpretive latitude in enforcing regulations. This decision and the pending litigation in Iowa v. SEC signals a new era of judicial scrutiny over federal agencies' statutory authority, posing challenges to the SEC's climate-related rulemaking. This Article aims to be both practical and policy-oriented. It focuses on the maritime industry because that industry faces unique regulatory challenges, especially in complying with Scope 1, 2, and 3 emissions disclosures under the SEC's proposed rules. The difficulty in accurately reporting indirect emissions (Scope 3), combined with the sector's global nature, introduces additional complexities for maritime companies. We analyze the impact of Loper Bright on the SEC's ability to require emissions disclosures and its broader ESG agenda by focusing on the maritime sector, which is grappling with increasing global pressure to provide real-time emissions data. Finally, the Article offers policy recommendations for maritime companies navigating this uncertain regulatory environment, emphasizing the need for legislative clarity to support sustainable practices while avoiding costly litigation. These recommendations provide a window into measures that companies outside of the maritime industry can adopt.
About the Author
Gregory S. McNeal. Professor of Law and Public Policy at Pepperdine University Caruso School of Law and a board member at SailPlan.
Charlotte Runzel Lemos. Sustainability Consultant at Guidehouse.
Citation
99 Tul. L. Rev. 1027