A suite of recent Supreme Court decisions will create regulatory uncertainty with significant implications for the private sector and stability of the capital markets.

On Friday, a Supreme Court decision was announced, overturning a longstanding legal standard known as Chevron deference, which enabled federal agencies and their subject matter experts to interpret ambiguous statutes.

The undoing of this doctrine is expected to lead to inconsistencies across the lower courts, if some strike down and others uphold the same regulatory guidance. In turn, businesses and investors would be forced to contend with years of inconsistent and unreliable guidance, as the courts work to resolve potentially conflicting regulatory standards across states.

“This decision will create regulatory instability, leading to uncertainty for investors and businesses that rely on transparent, accountable markets. Most importantly, the rulings imperil the ability of the government to respond to critical public needs,” said Fran Seegull, President of the U.S. Impact Investing Alliance. “They represent an attack on corporate accountability and consumer welfare, given that the federal agencies likely to be implicated are responsible for keeping our food safe, our water and air clean, and our roads and bridges open. This is a strike against efficient, fair policymaking and a resilient, competitive U.S. economy.”

This news comes amid other Supreme Court decisions that limit the use of administrative courts for enforcement by agencies like the SEC and encourage new challenges of long standing regulations. Taken together, these rulings demonstrate a coordinated attack on the administrative state.

Effective federal agencies are foundational to the work of impact investors, and indeed, democracy itself. Read more from the U.S. Impact Investing Alliance about ongoing legal attacks on the rights of investors and the abilities of regulators to respond to market needs.