In March 2024, the Securities and Exchange Commission (the "SEC" or the "Commission") adopted rules entitled The Enhancement and Standardization of Climate-Related Disclosures for Investors (the "Rules"), intended to standardize how public companies report material climate-related risks and greenhouse gas emissions. However, the Rules were almost immediately the subject of litigation, which was subsequently consolidated in the U.S. Court of Appeals for the Eighth Circuit (the "Eighth Circuit"), and, since April 2024, the Rules have been subject to a voluntary stay pending judicial review.
A Change in the Forecast
In February 2025, Acting SEC Chairman Mark Uyeda issued a statement disclosing that he directed the Commission staff to request that the Court refrain from scheduling oral arguments in the case, and outlined his concerns, including whether the Commission had statutory authority to adopt the Rules and the need for the Rules. On March 27, 2025, the SEC voted to withdraw its defense of the Rules, with Commissioner Caroline A. Crenshaw dissenting.
April 2025 Litigation Abeyance
Following this decision, a coalition of 18 states and the District of Columbia intervened to uphold the Rules in the proceedings. On April 24, 2025, the Eighth Circuit granted their motion to hold the case in abeyance, and required the SEC to file a status report addressing: (i) whether the SEC intended to review or reconsider the Rules; (ii) if it determined not to do so, whether it would adhere to the Rules if the legal challenges are denied; and (iii) if not, why the SEC would not review or reconsider the Rules at that time.
July 2025 SEC Report
On the Eighth Circuit's July 2025 deadline, the SEC submitted its status report, stating that it did not intend to review or reconsider the Rules at that time. The SEC also requested that the Eighth Circuit proceed to resolve the litigation on the merits, emphasizing that the outcome would inform the scope and need for any future SEC action, as well as whether the Commission may have exceeded its statutory authority in adopting the Rules. However, the SEC declined to state whether it would enforce or adhere to the Rules if they survived judicial review, explaining that any reconsiderations would require future deliberations and votes by the Commission.
Commissioner Crenshaw issued a pointed dissent, characterizing the status report as "wholly unresponsive" to the Eighth Circuit's directive and stating that the "unspoken truth" is that the Commission does not intend to "adhere to the [R]ules if the petitions for review are denied." She stressed that rescinding, repealing or modifying the Rules must be completed in accordance with the Administrative Procedure Act, rather than through the judicial system.
September 2025 Eighth Circuit Order
On September 12, 2025, the Eighth Circuit ordered that the litigation would again be held in abeyance until such time as the SEC reconsider or renews it defense of the Rules. In its order, the Eighth Circuit emphasized that the SEC has the "responsibility to determine whether its Final Rules will be rescinded, repealed, modified, or defended in litigation." Therefore, unless or until the SEC reconsiders or resumes defending the Rules, which seems very unlikely at this time, the litigation will remain paused.
Shifting Winds Beyond DC
Even in the absence of rules requiring disclosure of climate change-related risk on the federal level, some states have adopted regulations addressing disclosure of climate-based risks and greenhouse gas emissions. For example, California's SB 253 and SB 261 appear to be moving ahead at this time, requiring disclosures that, in some cases, may go further than the Rules (read more here). In May 2025, the California Air Resources Board held a workshop on compliance with the legislation and, in July 2025, issued guidance for companies. Illinois and Colorado introduced their own legislation, HB 3673, and HB 25-1119, respectively, each of which are related to emissions disclosures, in early 2025. Many state regulations are intended to apply not only to certain companies that are incorporated in a state, but also extend to those meeting certain criteria that do business within the state, such that these statutes can have potentially far-reaching consequences. For example, California's SB 253 requires businesses with annual revenues of more than $1 billion that do business in California to disclose Scope 1 and Scope 2 GHG emissions, starting in 2026 and Scope 3 GHG emissions, starting in 2027.
In July 2023, the International Sustainability Standards Board (ISSB) published its global sustainability disclosure standards. These standards provide "disclosure requirements designed to enable companies to communicate to investors about the sustainability-related risks and opportunities they face over the short, medium and long term and "set out specific climate-related disclosure requirements for a company to disclose information about its climate-related risks and opportunities." As of June 2025, 36 jurisdictions had adopted or otherwise used the ISSB's standards or are finalizing steps towards introducing them into their regulatory frameworks.
On September 10, 2025, SEC Chair Paul Atkins raised concerns over the focus of the ISSB's parent organization, the IFRS Foundation, at the inaugural OECD Roundtable on Global Financial Markets in Paris. With the IFRS Foundation now overseeing the International Accounting Standards Board (IASB) and ISSB, Chair Atkins remarked that "the IFRS Foundation's remit cannot divert its focus from its long-standing core responsibility of funding the IASB" and that the IASB should promote "high-quality accounting standards that are focused solely on driving reliable financial reporting and are not used as a backdoor to achieve political or social agendas."
Companies with EU operations, including U.S. domestic companies with operations there, must comply with the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD), which require climate and sustainability reporting from 2025 onward. Also in Paris, Chair Atkins took aim at the CSRD and CSDDD, sharing his concern about "the prescriptive nature of these laws and their burdens on U.S. companies," and stating that Europe should "focus on reducing unnecessary reporting burdens on issuers rather than pursuing ends that are unrelated to the economic success of companies and to the well-being of their shareholders."
In addition, the SEC's 2010 climate disclosure guidance remains in effect. The guidance suggests that, where material, companies should disclose the direct effect of environmental legislation, regulation and international treaties; the indirect consequences of climate change; and the impact of physical changes to our planet caused by the climate.
Conclusion
While climate-related risk and emissions disclosure requirements continue to advance on the state and international levels, the future of the SEC's climate-related risk disclosure rules remains uncertain, and, at least under the current Commission, unlikely to move forward.
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