The US Securities and Exchange Commission (SEC) has announced it will no longer defend its contentious rules requiring companies to disclose climate-related risks and greenhouse gas emissions, marking a significant shift in regulatory direction under the new administration.
In a formal vote on Friday, the Commission opted to cease its involvement in ongoing litigation over the climate disclosure regulations, which had drawn sharp criticism from several U.S. states and private sector entities.
“The goal of today’s Commission action and notification to the court is to cease the Commission’s involvement in the defence of the costly and unnecessarily intrusive climate change disclosure rules,” said SEC Acting Chairman Mark T. Uyeda in a statement.
The rules in question, adopted on 6 March 2024, mandated a comprehensive new reporting framework obligating listed companies to provide detailed information on their exposure to climate-related financial risks and emissions. Critics argued that the measures imposed burdensome compliance costs and exceeded the SEC’s regulatory remit.
Legal challenges to the rules were consolidated in the Eighth Circuit Court of Appeals under the case Iowa v. SEC (No. 24-1522), prompting the Commission to place the regulations on hold pending judicial review. Briefings in the case had concluded prior to the recent change in administration.
Following the Commission’s decision, SEC staff submitted a letter to the court confirming the withdrawal of its defence. The letter stated that the Commission’s legal counsel is no longer authorised to argue in support of the rules and that any time allocated for oral argument is relinquished to the court.
The move signals a potential retreat from aggressive regulatory action on climate risk disclosure, as the agency re-evaluates its priorities amid shifting political and legal landscapes.
