The U.S. Securities and Exchange Commission (SEC) announced on Friday that it has formally proposed the rescission of the corporate climate disclosure rules introduced by the agency during the Biden administration.
The climate reporting rules were adopted by the agency in 2024, under prior Biden-appointed SEC Chair Gary Gensler, establishing for the first time requirements for public companies in the U.S. to provide disclosure on climate risks facing their businesses, plans to address those risks, the financial impact of severe weather events, and, in some cases, greenhouse gas emissions originating from their operations.
Under the Trump administration, however, the SEC sharply reversed course, initially attempting to have the rule scrapped by the courts, with the agency announcing that it planned to drop its defense of the rules to legal challenges, and subsequently the telling the court that it did not intend to review or reconsider the rule, requesting instead that the court decide the issue. The appeals court refused the request in September 2025, however, stating that “It is the agency’s responsibility to determine whether its Final Rules will be rescinded, repealed, modified, or defended in litigation.”
In its statement announcing the proposed rescission, the SEC justified the move by arguing that the rules exceed the scope of the agency’s statutory authority, but added that “even if it had authority to adopt such final rules, the Commission believes there are independent, compelling policy reasons to rescind them entirely,” noting in particular that it forms part of its focus of “restoring a materiality-focused approach to securities regulation.”
The agency added that it believes that the climate reporting rules “restoring a materiality-focused approach to securities regulation,” impose significant costs on companies and shareholders, and that they work against the agency’s focus on facilitating capital formation and promoting public company status.
SEC Chair Paul Atkins said:
“We must re-examine the costs, burdens, and benefits of disclosure mandates to make becoming and remaining a public company more attractive again. SEC disclosure obligations should comply with the Commission’s statutory authority, be guided by materiality as the North Star, avoid the practical effect of dictating corporate behavior, and be imposed only when the expected benefits justify the likely costs and burdens.”
Environmental groups sharply criticized the SEC move, and in particular the agency’s claim that the climate reporting rules were not designed to provide material information to investors.
Kathy Fallon, Director, Land Systems at Clean Air Task Force, said:
“The SEC’s mission is to protect investors and the public by ensuring they have access to material information. While imperfect, the rule was an important step toward giving investors consistent information about financially material climate risks, including the use of carbon offsets. “The Commission should withdraw this proposal and focus instead on implementing disclosure requirements that give both investors and the public the transparency they need.”
The standard notice-and-comment rulemaking procedure launched with the publication of the proposal could potentially be a lengthy process, starting with a 60-day comment period, with agency staff required to consider and respond to significant issues raised in the comments, and with the final rule itself being potentially open to legal challenges.
The rescission is likely to face legal challenges, with the Environmental Defense Fund (EDF) already stating that it intends to “vigorously oppose rolling back the rule, which would threaten the financial security of workers and retirees who have their life savings invested in the markets.”
Stephanie Jones, Senior Attorney for EDF, said:
“Climate change is causing stronger, more frequent – and more expensive – weather disasters. That’s putting Americans’ money at risk along with their health and safety. At the same time, clean energy companies are innovating, creating jobs, and saving Americans money. The SEC’s Climate Risk Disclosure Rule makes sure people have information that they need to make important financial decisions.”
