SEC Proposes To Rescind Climate-Related Disclosure Rules

On May 29, 2026, the SEC proposed to rescind amendments to its rules under the Securities Act and the Exchange Act that would require registrants to provide certain climate-related information in their registration statements and annual reports (Climate Rules).

Background

The Climate Rules, which have not become effective (as described below), include many highly-prescriptive disclosure requirements, including, among others: (i) information about a registrant’s material climate-related risks; (ii) the governance and management of such risks; (iii) disclosure, when material, of a registrant’s greenhouse gas (GHG) emissions for accelerated filers and large accelerated filers (including attestation reports for registrants that are required to provide Scope 1 and/or Scope 2 emissions disclosure); (iv) information about internal carbon pricing; (v) scenario analysis; and (vi) specified disclosures related to severe weather events and other natural conditions in a note to a registrant’s audited financial statements.

The Climate Rules are highly contentious, and almost immediately became subject to litigation. Various petitions were consolidated for review in the U.S. Court of Appeals for the Eighth Circuit, and on April 4, 2024, the SEC entered a stay of the Climate Rules pending the completion of the Eighth Circuit’s review. On March 27, 2025, the SEC voted to end its defense of the rules, and on September 12, 2025, the Eighth Circuit issued an Order holding the consolidated petitions for review in abeyance until the SEC reconsiders the challenged rules “by notice-and-comment rulemaking or renews its defense” of them. The Court noted that it was the SEC’s responsibility to determine whether the Climate Rules “will be rescinded, repealed, modified, or defended in litigation.” As a result, the Climate Rules remain stayed.

Recission Proposal

In its recission proposal, the SEC noted two independent reasons for recission of the Climate Rules. It has now determined that it did not have the statutory authority to adopt the Climate Rules in the first place, characterizing the Climate Rules as “a dramatic overreach of the Commission’s statutory authority.” It also stated that even if it had statutory authority to adopt the Climate Rules it should not have done so. The SEC includes a detailed discussion of additional rationales in support of its recession proposal, including that the Climate Rules: (i) are both unnecessary and inconsistent with the SEC’s “registrant-specific, materiality-based” disclosure regime; (ii) do not address investor protections, and thus go beyond the “legitimate policy concerns of the Federal securities laws”; (iii) require expenditures that “are not justified by the informational benefits they may provide to some investors”; and (iv) are inconsistent with the SEC’s “policy objectives of facilitating capital formation and promoting public company status.”

Of course, recission of the Climate Rules does not eliminate any obligation to disclose climate-related matters that may exist under general disclosure standards.

Comments are due within 60 days of publication in the Federal Register.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.