SEC proposes scrapping climate disclosure rules for U.S. public companies

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SEC scraps climate disclosures

Highlights

The SEC proposes fully rescinding climate disclosure rules requiring U.S. public companies to report greenhouse gas emissions and climate-risk details, citing excessive costs and statutory overreach.
Litigation led the SEC to stay the rules on April 4, 2024, and as of March 27, 2025, the agency voted to halt its legal defense amid continuing appeals in the Eighth Circuit.
The SEC's reversal signals a major regulatory shift, prioritizing materiality and cost concerns over prescriptive climate reporting, affecting both issuer compliance costs and investor-access to climate risk data.

Rule rollback and legal rationale

As announced by the Securities and Exchange Commission, the proposal would rescind in full rules requiring companies to include specified climate-related information in registration statements and annual reports. The agency says the requirements are excessively burdensome and costly, and argues they go beyond the SEC's statutory authority.

SEC Chairman Paul S. Atkins says disclosure obligations should remain tied to the Commission's legal mandate, guided by materiality, and imposed only when expected benefits justify likely costs and burdens. The agency also says the climate rules risk influencing corporate behavior rather than focusing on information that is material to investors.

The rules being targeted were approved in March 2024 through amendments under the Securities Act of 1933 and the Securities Exchange Act of 1934. They required detailed disclosures from most public companies on issues including greenhouse gas emissions, climate-risk management and the financial statement effects of severe weather events.

Litigation timeline and market implications

Implementation of the climate disclosure rules has already been interrupted by litigation. The SEC stayed the rules on April 4, 2024, pending consolidated litigation in the U.S. Court of Appeals for the Eighth Circuit, then voted on March 27, 2025, to end its defense of the final rules.

On Sept. 12, 2025, the Eighth Circuit ordered the consolidated petitions for review to remain in abeyance while the Commission reconsiders the challenged rules through notice-and-comment rulemaking or renews its defense. The SEC now says the rules are unnecessary, inconsistent with a registrant-specific materiality approach, and misaligned with its goals of facilitating capital formation and supporting public company status.

For issuers and investors, the move signals a broader regulatory shift away from prescriptive climate reporting at the federal securities level in the U.S. The Commission says the existing framework would impose substantial costs on companies and shareholders without delivering benefits that justify those burdens.

Enbridge’s 2025 Sustainability Report and expanded emissions-related disclosures were previously covered by our publication as the company sought to strengthen transparency around ESG practices amid heightened regulatory scrutiny. We also noted Enbridge’s investments in hydrogen, renewable natural gas, and carbon capture, alongside ESG index recognition, as factors supporting longer-term investor interest even while the stock traded in a tight range.

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