SEC Drops Climate Disclosure Defense | Mayer Brown Free Writings + Perspectives
On March 27, 2025, the Securities and Exchange Commission (SEC) voted to end its defense of the climate-related disclosure rules, which, even as scaled back when finally adopted, still would have required fairly substantial disclosures regarding climate-related risks as well as, for certain companies, disclosures relating to greenhouse gas emissions. As a result, agency attorneys will no longer appear before the Eighth Circuit, where the various challenges by both states and private parties were consolidated for hearing in Iowa v. SEC. In a letter penned to the Eighth Circuit, the SEC yielded all oral argument time back to the court and stated that its counsel is no longer authorized to advance the case. The SEC’s involvement in the proceeding has, in effect, ceased.
The climate-related disclosure rules were adopted in a 3-2 vote along party lines on March 6, 2024 under then-Chair Gensler. The final rules represented a substantial scale-back from those initially proposed in 2022. The final rules were slated for a multi-phased implementation that would not have been fully consummated until 2033. Nonetheless, the rules were met with significant pushback and immediate lawsuits alleging, among other things, that the rules represented an unlawful expansion of authority and were overly-burdensome in a manner that would discourage and impede business. While the Eighth Circuit has not yet issued a ruling or statement on the matter and the case remains pending, it is likely that the SEC’s announcement has sealed the fate of the climate change rules. The SEC’s press release is available here. Commissioner Crenshaw released a statement in which she observes that “the current Commission would like to dismantle [the] rule. And they would like to do so unlawfully. The Administrative Procedure Act (APA) governs the process by which we make rules. The APA prescribes a careful, considered framework that applies both to the promulgation of new rules and the rescission of existing ones. There are no backdoors or shortcuts. But that is exactly what the Commission attempts today.” Commissioner Crenshaw’s full statement is available here.
[View source.]
