The Securities and Exchange Commission (SEC) voted to end its defense of the rules requiring disclosure of climate-related risks and greenhouse gas emissions.
“The goal of today’s Commission action and notification to the court is to cease the Commission’s involvement in the defense of the costly and unnecessarily intrusive climate change disclosure rules,” SEC Acting Chairman Mark Uyeda said.
The rules, adopted by the SEC on March 6, 2024, required registrants to provide certain climate-related information in their registration statements and annual reports. The rule also required information from a registrant on their climate-related risks that have materially impacted or were reasonably likely to have a material impact on, its final business strategy.
The rules created a detailed and extensive special disclosure regime about climate risks for issuing and reporting companies, said SEC officials.
However, the rules have been challenged by states and private parties. The litigation was consolidated in the Eighth Circuit case, called Iowa v. SEC, No. 24-1522 (8th Cir.). The SEC previously stayed effectiveness, pending completion of that litigation. Briefing in the cases was completed before the change in Administrations.
After the SEC’s vote last week, SEC staff sent a letter to the court stating that the commission withdraws its defense of the rules. It further stated that the Commission’s counsel is no longer authorized to advance the arguments in the brief the Commission had filed.
In addition, the letter states that the Commission yields any oral argument time back to the court.
Republican members of the House Financial Services Committee, including Chairman French Hill (R-AR), Rep. Ann Wagner (R-MO), and Rep. Bill Huizenga (R-MI), applauded the SEC’s decision.
“The SEC’s decision to abandon its defense of the climate disclosure rule is a welcome and long-overdue recognition of what many of us have been saying from the start: this rule was a gross overreach of the SEC’s statutory authority. Rather than focusing on its core mission—protecting investors, maintaining fair and efficient markets, and facilitating capital formation — the Commission, under former Chair Gensler, pursued a radical climate agenda that stretches the law and imposes significant costs on public companies and investors. This reversal is a victory for common sense, American businesses, and the rule of law. This decision marks a turning point for the SEC to return to its fundamental purpose and stop being used as a political tool to advance policies that properly belong in the legislative branch,” the lawmakers said.