On March 27, the Securities and Exchange Commission (SEC) voted to stop defending its climate disclosure rules, which required public companies to report climate-related risks and greenhouse gas emissions. These climate-related disclosure rules were originally adopted on March 6, 2024.
SEC Acting Chairman Mark T. Uyeda explained the decision, stating, “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.”
Acting Chair Uyeda cited his and Commissioner Hester Peirce’s earlier dissent, arguing the Climate Rule exceeded the SEC’s authority and that existing regulations already covered material climate disclosures. He also questioned whether the rule was properly adopted under the Administrative Procedure Act (APA).
The rules remain in effect unless a court officially invalidates them or the SEC repeals them through a formal rulemaking process. However, in April 2024, the SEC issued a stay on enforcement while legal challenges continue.
Following the vote, SEC staff formally notified the court that the agency would no longer defend the rules. Additionally, the SEC’s legal team is no longer authorized to argue in support of the regulations, and the Commission yields any oral argument time back to the court.
Depending on the jurisdiction, companies may still be required to disclose climate-related risks and greenhouse gas emissions. For example, in California climate-related disclosure regulations are required by the state.
APGA will continue to monitor this issue and provide updates on any future developments.
For questions on this article, please contact Sydney Novoa of APGA by phone at 202-464-0834 or email at snovoa@apga.org.