SEC Proposes to Rescind 2024 Climate-Disclosure Rules

The SEC proposed to rescind climate-related disclosure rules adopted in March 2024, asserting that the rules exceed the agency's statutory authority and impose substantial costs not justified by the informational benefits to investors.

The proposal withdraws requirements covering greenhouse-gas emissions, climate-related risk management, board oversight and certain required financial-statement effects of severe weather events. The proposal rescinds amendments to Regulation S-X Articles 8-01 ("General Requirements,") including Rule 210.14-01 ("Instructions") and Rule 210.14-02 ("Metrics,") Regulation S-K Items 1500 through 1508 ("Climate Related Disclosure") and Item 601 ("Exhibits,") Reg S-T 232.405 ("Interactive Data File submissions,") SA Rule 436 ("Consents") and the relevant registration and reporting forms. (Note: The relevant rules were never codified in the Code of Federal Regulations because the final rules had been stayed before taking effect. On September 12, 2025, the Eighth Circuit held the consolidated petitions in abeyance pending the SEC's reconsideration through notice-and-comment rulemaking.)

As to statutory authority, the agency argued the 2024 rules (i) went beyond the categories of disclosure Congress required under the Securities Act and the Exchange Act, (ii) exceeded the limits Congress placed on the SEC's authority to except from or add to those required disclosures, (iii) intruded on areas of corporate governance traditionally regulated by state law, and (iv) ran afoul of the U.S. Supreme Court's major-questions doctrine - the principle that an agency must have clear congressional authorization before asserting "highly consequential power" over a substantial policy area of vast economic and political significance. The SEC pointed to the Environmental Protection Agency as the federal agency tasked by Congress with collecting and publishing greenhouse-gas emissions data from major emitters.

As to policy, the SEC said the 2024 rules deviate from a registrant-specific, materiality-based approach to disclosure, and thus they go beyond the policy concerns of the federal securities laws. Further, the SEC stated that the rules impose substantial costs not justified by their benefits; and those costs are at odds with the SEC's policy objectives of facilitating capital formation and promoting public company status. The SEC noted that, at the time of adoption, it had estimated annual compliance costs per registrant averaging between roughly $197,000 and over $739,000 over the first ten years. Rescinding the rules (considering inflation and aggregating across affected registrants) could generate annualized savings of about $4.9 billion per year over the next ten years. The SEC said reliance interests are limited because the rules never took effect.

The SEC also argued that the existing line-item disclosure requirements, accounting-standard obligations and the federal securities laws' antifraud provisions already require disclosure of material climate-related impacts where they bear on a registrant's financial condition.

Comments are due 60 days after publication in the Federal Register.