SEC proposes rescinding climate disclosure rules in U.S. markets

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SEC rescinds climate disclosure rules

Highlights

SEC proposed rescinding climate disclosure amendments to the Securities Act of 1933 and 1934, refocusing on financially material disclosures only.
Commissioner Mark T. Uyeda stated the climate rule exceeded the SEC’s financial regulation mandate and cited procedural and statutory deficiencies requiring re-proposal.
The rule, currently stayed and under litigation in Iowa v. SEC, faces formal rescission as the SEC voted to end its legal defense in March 2025 and emphasizes financial materiality in reporting.

Regulatory reversal centers on disclosure scope

As stated by the Securities and Exchange Commission, the agency is proposing to rescind amendments under the Securities Act of 1933 and the Securities Exchange Act of 1934 that require registrants to include certain climate-related information in registration statements and annual reports. Commissioner Mark T. Uyeda says the proposal is intended to refocus the SEC on disclosures that are materially relevant to investors' financial decisions.

Uyeda argues existing SEC requirements already cover material climate-related risks where relevant through business descriptions, risk factors, management discussion and analysis, and financial statements. In his view, the climate rule extends beyond the SEC's intended role as a financial regulator and attempts to shape business conduct through disclosure requirements rather than investor protection standards grounded in materiality.

He also says the rule raises statutory and procedural concerns, including whether the agency should have re-proposed it after significant changes from the original version. That critique adds to the SEC's current position that the rule is not sufficiently supported by its legal authority.

Court challenge and market implications

The climate disclosure rule remains under litigation in the U.S. Court of Appeals for the Eighth Circuit in Iowa v. SEC, and the Commission had already stayed the rule's effectiveness while the case proceeds. Uyeda notes that in March 2025 the Commission voted to end its defense of the rule, and says the new rescission proposal is designed in part to address concerns raised in the court process.

The move marks a significant policy shift for companies, investors and compliance teams that had been preparing for expanded climate reporting obligations. If adopted, the rescission would reinforce a narrower interpretation of SEC disclosure policy, with the agency emphasizing financial materiality over broader environmental and social reporting goals.

Our earlier coverage of the U.S. Department of Labor’s finalized rule on union financial reporting explained how the agency is modernizing Form LM-2 and introducing an enhanced Long Form for the largest labor organizations. The update also raises filing thresholds for smaller unions to reduce compliance burdens, while aiming to strengthen transparency, deter fraud, and improve member oversight as unions’ financial operations grow more complex.

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