Lawsuits against SEC climate disclosure rules may last beyond 2025

Jerry Theodorou, a former AIG executive now working as a director at R Street Institute, a think tank, said there are scenarios in these lines of business that could be affected by the disclosures.

He highlighted an example in energy, whereby energy firms might not provide adequate disclosures of their emissions and are also found liable for environmental damage. The environmental impairment could lead to insurance losses as well as third-party environmental impairment liability (EIL) litigation.

He said that similar scenarios could play out in commercial agriculture, where after inadequate emissions disclosures a firm might be found responsible for environmental impairment.

“This could also contribute to first-party losses and open the door for third-party litigation,” he added.

Theodorou said that these scenarios could also hit general liability and energy excess limits.

He also pointed to primary and excess property, to the extent that an insured’s higher disclosed emissions could cause elevated property losses for that company.