A U.S. Appeals Court has put a temporary halt on the Securities and Exchange Commission’s (SEC) recently enacted climate-change disclosure rules, following a lawsuit from oil industry companies that challenged the rules.

Before the ink was even dry on the SEC’s March 6 issuance of rules requiring public companies to disclose their climate-related risks, legal challenges began rolling in. The Fifth U.S. Circuit Court of Appeals this week granted a request for an administrative stay on the rules after oil-field-services companies Liberty Energy and Nomad Proppant Services filed a lawsuit challenging them, according to the Wall Street Journal.

Another challenge to the SEC ruling is a legal suit from a coalition of 10 states, including Georgia, West Virginia and Alaska, with some Republican lawmakers from those states calling the climate-disclosure rules “illegal and unconstitutional.” The U.S. Chamber of Commerce has said it’s also filing suit to halt implementation of the SEC rules.

Objections to the SEC’s actions don’t come solely from the political right. Environmental group Sierra Club has said it was considering a legal challenge for the SEC’s “arbitrary removal of key provisions” from its climate rule, according to ESG Dive. The Sierra Club took issue, in particular, with the lack of Scope 3 emissions reporting requirements from the SEC.

The SEC’s new rules – an attempt to standardize climate-related reporting – require large public companies to disclose a variety of information regarding climate-related risks, such as flood and wildfires, and how these might impact a company’s strategy, business model and financial outlook. The rules also require companies to report on Scope 1 and Scope 2 greenhouse gas (GHG) emissions starting in 2026.

Scope 1 emissions are direct GHG emissions that come from sources controlled by a company, and Scope 2 are associated with the purchase of electricity, heating and cooling. The vast majority of emissions are Scope 3 indirect emissions that occur up and down a company’s supply chain.

The SEC said it will “vigorously defend” the climate-reporting rules in court, according to the Wall Street Journal.

Regardless of the challenges, analysts said that big businesses are unlikely to stop measuring and reporting on their direct and indirect emissions – and requiring such metrics from their vendors in the promotional products industry and beyond. Companies will still need to report Scope 3 emissions through California’s new climate disclosure laws, the European Union’s sustainability reporting requirements and for the International Sustainability Standards Board’s framework.

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