SEC Silent on Enforcement of Climate Disclosure Rule, Pending Outcome of Legal Challenge
U.S. Securities and Exchange Commission (SEC) Pauses Enforcement of Climate Disclosure Rules
The U.S. Securities and Exchange Commission (SEC) has not formally rescinded its climate disclosure rules, but it has stopped defending them in court and has asked the U.S. Court of Appeals for the Eighth Circuit to decide on the rule challenges without the SEC revisiting or rescinding the rules at this time.
The SEC adopted the climate disclosure requirements in March 2024 under Chair Gary Gensler, mandating U.S. public companies to report on climate risks and greenhouse gas emissions. However, after a change in administration and leadership at the SEC, the Commission stopped defending the rules in litigation in April 2025.
The SEC's stance has resulted in a series of legal challenges, including a lawsuit against the rule filed by 25 Republican state attorneys general and an appeals court motion requesting a stay of the rules led by the U.S. Chamber of Commerce. In response to this, the Eighth Circuit Court asked the SEC to clarify if it would review, reconsider, or uphold the rules. The SEC refused to answer definitively, instead requesting the court rule on the validity of the rules.
Presently, the rules remain stayed—meaning they are not being enforced—and the litigation is pending. The SEC has not prejudged its action regarding the climate disclosure rules. It has not committed to adhering to the rules if the petitions for review are denied, nor has it indicated whether it would uphold the rules if the court rules against the petitions. The SEC's future actions in the matter would be subject to Commission deliberation and vote of its members.
The position of the SEC on the climate disclosure rules has changed since the resignation of Gary Gensler in January and the appointment of Paul Atkins as Chair, who has also opposed the climate reporting rule. Commissioner Caroline Crenshaw, who was the only Commissioner who supported the rule's adoption and is the only one remaining, accused the SEC of trying to get around the process required to rescind the rule.
Many states have intervened to defend the SEC's climate disclosure rules. Despite the current situation, the SEC has declared that it does not intend to review or revisit its climate disclosure rules at this time. The U.S. Court of Appeals for the Eighth Circuit is now tasked with deciding on the validity of the rules, and the SEC will consider court decisions before deciding any future action such as rescinding, modifying, or replacing the rules.
[1] SEC's Status Report to the Eighth Circuit Court [2] SEC's Request for the Court to Rule on the Validity of the Climate Disclosure Rules [3] Eighth Circuit Court's Request for Clarification from the SEC [4] SEC's Response to the Eighth Circuit Court's Request for Clarification
- In the ongoing legal battle, the SEC's request for the U.S. Court of Appeals for the Eighth Circuit to rule on the validity of the climate disclosure rules reflects the agency's stance on climate-change reporting and its commitment to environmental-science.
- The SEC's decision not to defend the climate disclosure rules in court and its request for the Eighth Circuit Court to rule on the rule challenges without revisiting or rescinding them shows a political dimension, intertwining policy-and-legislation with climate-change issues and general-news.
- In the wake of the SEC's stance and the subsequent legal challenges, the active intervention of several states highlights the growing importance of climate-change and climate-change reporting in domestic policy and environmental-science debates.
