Mark T. Uyeda, Acting Chairman of the U.S. Securities and Exchange Commission (SEC), announced on 11 February 2025 that he is taking action regarding the Enhancement and Standardisation of Climate-Related Disclosures for Investors rule. The rule, originally adopted on 6 March 2024, remains the subject of ongoing legal challenges and is currently stayed pending litigation in the Eighth Circuit Court of Appeals.
Uyeda, who had previously voted against the rule, described it as deeply flawed, warning that it could harm capital markets and the broader economy. He reiterated concerns that the SEC lacks the statutory authority to regulate climate-related disclosures, arguing that such policies should be mandated by Congress rather than a financial regulatory agency.
The climate disclosure rule has faced significant opposition, both within the Commission and from public comments submitted during the rulemaking process. Critics argue that it imposes costly and unnecessary disclosure requirements, compels the release of financially immaterial information, and exceeds the SEC’s regulatory authority.
Commissioner Hester Peirce, who also opposed the rule, had previously stated that existing disclosure regulations were already sufficient and that the anticipated benefits did not justify the costs. Uyeda echoed these concerns, maintaining that the rule represented climate regulation under the SEC’s seal, rather than a legitimate financial disclosure requirement.
The Commission’s legal filings in the Eighth Circuit litigation were submitted prior to Uyeda’s appointment as Acting Chairman and do not reflect his views. He questioned whether the SEC followed proper procedures under the Administrative Procedure Act in adopting the rule and expressed doubts about the cost-benefit analysis used to justify it.
Uyeda also highlighted recent developments that could impact the litigation, including changes in the SEC’s leadership and a Presidential Memorandum imposing a regulatory freeze. He stated that the Court and involved parties should be informed of these developments.
In light of these concerns, Uyeda has instructed SEC staff to notify the Court of the recent changes and to request a delay in scheduling oral arguments. This would allow the Commission time to review its position and determine next steps regarding the contested rule.
The SEC intends to promptly update the Court on its final position in the litigation, leaving open the possibility of modifying or withdrawing its defence of the climate disclosure rule.
