SEC Acting Chair Mark Uyeda has halted the defense of the climate disclosure rule, questioning its authority and necessity. Despite this federal reversal, experts suggest commercial real estate may see little practical relief from reporting burdens due to existing state and local regulations.
“I continue to question the statutory authority of the commission to adopt the rule, the need for the rule, and the evaluation of costs and benefits,” he said, according to The Wall Street Journal.
Whatever the implications for other industries, commercial real estate may not see much practical easing of reporting burdens according to some experts speaking with GlobeSt.com.
Recommended For You
“I’m not sure that anything that the federal government does is going to impact what state and local governments do, as, from a legal perspective, real estate by its nature is largely governed at the state and local level,” says Vasiliki Yiannoulis-Riva, a shareholder at law firm Polsinelli. “I suppose it is possible that local governments might seek to limit or reverse legislation that deals with restricting greenhouse gas emissions — and reporting requirements related to those laws — given the climate in Washington, but I am not sure that it is really going to matter at the end of the day in blue cities like New York, Los Angeles, and Chicago.”
“There are many state and municipal GHG reporting requirements that apply to commercial real estate, such as New York City’s Local Law 97 and California’s Mandatory Greenhouse Gas Emissions Reporting requirement, and they have applied during the time that the SEC climate disclosure rules have been debated, negotiated and published,” Day Pitney environmental law partner Kirstin Etela, said, which agrees with the premise that the federal government may not have much influence.
The SEC rule had more limited reach for CRE than it might have seemed on the surface says Bill Harter, principal ESG solutions advisor at Visual Lease. “Let's remember that the SEC rule as it was passed last year applied only to us publicly traded companies, which is approximately 3,500 businesses,” he told GlobeSt.com. “Only a small percentage of those were required to report Scope 1 and 2 emissions, and only a very small percentage of those had to report Scope 3, meaning very few companies were directly impacted.
“The California legislation, on the other hand, applies to some 10,000 public and privately held enterprises,” Harter said. “That remains unchanged — although the implementation does seem to be slower than anticipated. Let's also remember that real estate landlords often do not directly meet the statutory requirements — the demand for information comes from their tenants.”
There are reasons for monitoring and reporting beyond regulation, according to Sara Anzinger, senior vice president of capital markets at Measurabl. “Market drivers related to outcomes like lower operating expenses, increased tenant demand, greater access to capital, and generally speaking, competitive advantage, are pushing US owner/operators forward,” she said.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
