On February 11, 2025, the Securities and Exchange Commission (SEC) Acting Chair Mark Uyeda issued a statement and effectively paused the SEC’s efforts to defend the Enhancement and Standardization of Climate-Related Disclosures for Investors rule (the Climate Disclosure Rule).
The Climate Disclosure Rule adopted by the SEC on March 6, 2024 would have required public companies to disclose climate-related risks and greenhouse gas emissions, among other required disclosures. Almost immediately after its adoption, the Climate Disclosure Rule faced numerous legal challenges, which were consolidated before the Eighth Circuit Court of Appeals. The SEC then stayed the effectiveness of the Climate Disclosure Rule pending the resolution of this litigation. Now, with Mr. Uyeda’s statement, SEC personnel have been directed to notify the Eighth Circuit of the SEC’s position and request that the court “not schedule the case for argument to provide time for the [SEC] to deliberate and determine the appropriate next steps in these cases.” Mr. Uyeda’s statement called the Climate Disclosure Rule “deeply flawed” and questioned the need for it, as well as its costs and benefits.
While it is possible that the SEC could seek to adopt a substantially revised and reduced rule regarding climate-related disclosures, it is more likely that the SEC will, for now, either repeal the Climate Disclosure Rule or simply allow the Eighth Circuit to overturn it without argument. Although companies will likely not be subject to the Climate Disclosure Rule requirements, they may still be subject to similar rules adopted by certain states, including California, and foreign jurisdictions such as Canada, Australia and the European Union.
