US regulator proposes full withdrawal of climate disclosure rules
The US Securities and Exchange Commission has moved to rescind its controversial climate-related disclosure requirements, marking a significant shift in regulatory posture following legal challenges and internal policy reviews.
The US Securities and Exchange Commission has proposed the complete rescission of rules that mandated public companies to disclose climate-related information in registration statements and annual reports. The proposal, released by the Commission, argues that the existing regulations are overly burdensome and costly, exceeding the agency's statutory authority.
SEC Chairman Paul S Atkins stated that the move aims to return the regulator to its core mandate, guided by materiality, and to avoid dictating corporate behaviour. He emphasised that disclosure obligations must comply with legal authority, serve as a practical guide for investors, and be imposed only when the expected benefits justify the likely costs and burdens on issuers.
The regulatory landscape for these rules has shifted dramatically since their inception. In March 2024, the Commission approved amendments under the Securities Act of 1933 and the Securities Exchange Act of 1934, requiring granular disclosures on matters such as greenhouse gas emissions and the financial effects of severe weather events. However, the rules were stayed in April 2024 pending consolidated litigation in the US Court of Appeals for the Eighth Circuit.
By March 2025, the Commission had voted to end its defence of the final rules. This decision led to an order in September 2025 from the Eighth Circuit, which held the consolidated petitions for review in abeyance until the SEC either reconsiders the rules through notice-and-comment rulemaking or renews its defence. The current proposal fulfills the court's expectation by formally seeking to rescind the rules in their entirety.
The Commission noted that even if it possessed the authority to adopt such rules, there are independent and compelling policy reasons for their removal. The focus now shifts to restoring a materiality-focused approach to securities regulation. The public comment period for the proposed rescission will remain open for 60 days following the publication of the proposing release in the Federal Register.
