By David Callaway, Callaway Climate Insights

(David Callaway is founder and Editor-in-Chief of Callaway Climate Insights. He is the former president of the World Editors Forum, Editor-in-Chief of USA Today and MarketWatch, and CEO of TheStreet Inc.)

Gary Gensler threaded the slimmest of needles Monday as his Securities and Exchange Commission finally proposed a rule to mandate climate reporting, attempting to please environmental progressives without stepping on legal tripwires that could set President Biden’s climate agenda back years.

The SEC Chairman and his agency’s long-awaited rule, which requires public companies to disclose their direct greenhouse gas emissions and report climate risk to their businesses, will be attacked on three legal fronts. All are winnable.

First, business groups, the fossil fuel lobby, and Republican politicians will claim the SEC’s mandate is to protect investors, not fight climate change. Coming at a time when the Supreme Court is weighing a case about the Environmental Protection Agency’s authority to regulate climate change, legal questions about the SEC’s authority will almost certainly form the core of the biggest challenges.

At issue will be whether climate risk is indeed financial risk . . . .

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