Formal Rescission of the U.S. SEC Climate Disclosure Rules Has Begun

On May 4, 2026, the U.S. Securities and Exchange Commission (the “SEC”) submitted a proposed rulemaking titled Rescission of Climate‑Related Disclosure Rules to the Office of Information and Regulatory Affairs for review. This submission marks the SEC’s first formal step toward potential rescission, through notice-and-comment rulemaking, of its rules requiring disclosure of climate-related risks and greenhouse gas emissions (the “Rules”), over two years after their adoption.

History of the Climate-Related Disclosure Rules 

The Rules, proposed in 2022, were adopted on March 6, 2024 by a 3-2 vote of the SEC, after an extended comment period during which over 14,000 comments were received. The Rules immediately faced a series of legal challenges from all sides, with nine court petitions filed in several federal courts within 10 days, including: (a) a lawsuit filed by 25 Republican state attorneys general arguing that the SEC exceeded its authority in adopting the Rules; (b) an action filed by the Sierra Club claiming that the rules did not go far enough; and (c) a court filing requesting a stay of the Rules led by the U.S. Chamber of Commerce.

The petitions were subsequently consolidated and assigned by lottery to the Eighth Circuit Court of Appeals. In April 2024, the SEC announced that it would pause the implementation of the Rules pending resolution of the legal challenges. The SEC emphasized that this stay did not stay any other existing rules or guidance, including the long-standing Commission Guidance Regarding Disclosure Related to Climate Change, Release Nos. 33-9106; 34-61469 (Feb. 2, 2010) (the “2010 Guidance”).

Following the 2024 election, changes in the makeup of the SEC eliminated virtually all support for the Rules within the SEC, which voted to end its defense of the Rules on March 27, 2025.

Defense of the Rules

The SEC initially attempted to avoid the notice-and-comment procedure for rescission by requesting that the court issue a ruling on the legality of the Rules, after the SEC had withdrawn its defense of the Rules in the consolidated litigation before the Eighth Circuit. The court denied the SEC’s request in September 2025 and ordered the SEC to either reconsider the regulation through ordinary rulemaking procedures or to renew its defense of the Rules in court.

On May 7, 2026, the SEC sent a letter to the court, informing the court that the SEC “does not intend to renew its defense of the Rules” and confirming that it had started the process to formally rescind the Rules. In its letter to the court, the SEC stated its rationale for reconsidering the Rules, emphasizing its “concerns that the Rules exceed the Commission’s statutory authority and the costs of the Rules outweigh their benefits.”

The notice-and-comment rulemaking procedure could potentially be a lengthy process (as noted above, initial approval of the Rules took over two years). The procedure involves publishing the proposal along with explanations and legal authority justifying the proposed repeal, as well as holding a public comment period, with agency staff required to consider and respond to significant issues raised in the comments. Final rescission of the Rules is expected to be subject to legal challenge. However, given the already consolidated litigation in the Eighth Circuit, any legal challenges to rescission would likely be expedited.

What to Do About Climate-Related Disclosures Now 

Companies evaluating whether and how to make disclosures about climate-related issues and greenhouse gas emissions may examine their disclosure obligations, including how to navigate consistency where different requirements apply across different jurisdictions. Under federal securities law, such disclosures remain governed by traditional considerations of financial materiality, and the SEC’s 2010 Guidance remains instructive. However, the evolving European Union framework, including via the Corporate Sustainability Reporting Directive (“CSRD”), incorporates the concept of “double materiality” (i.e., how sustainability issues might create financial risks for the company (financial materiality) and how the company itself impacts people and the environment (impact materiality)). Further complicating the disclosure landscape are state-specific laws that have extraterritorial reach and that apply to both public and private companies, such as California’s SB 200s (SB 253 and SB 261), which currently face their own legal challenges, and New York’s anticipated Climate Corporate Data Accountability Act.

Companies may continue to monitor these developments and work with counsel to assess applicability and develop resilient governance and disclosure practices that hold up in the face of continuing uncertainty and fragmentation of frameworks.

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