SEC Moves Toward Rescinding Climate Disclosure Rule, Retreating Further From Investor Protection

SEC Moves Toward Rescinding Climate Disclosure Rule, Retreating Further From Investor Protection

WASHINGTON, D.C. — The Securities and Exchange Commission has submitted a proposed rule titled “Rescission of Climate-Related Disclosure Rules” to the White House Office of Management and Budget for review, advancing the agency’s effort to formally rescind its 2024 climate disclosure rule. The rule, which has not taken effect amid litigation, would have required public companies to disclose standardized information about financially material climate-related risks and, for some companies, greenhouse gas emissions.

In response, Jessye Waxman, Sustainable Finance Campaign Advisor with the Sierra Club, issued the following statement:

“The SEC has clear authority to require climate-related disclosures from public issuers, and it should be using that authority to protect investors. The SEC’s job is to ensure investors have access to material, decision-useful information, and investors have long recognized climate risk as financially material. Rescinding the rule would move markets backward by abandoning the prospect of a federal baseline for consistent, comparable, and decision-useful climate information. Treating climate disclosure as a political bargaining chip is a failure of investor protection and the public interest.”

BACKGROUND

The SEC adopted the final rule, formally titled “The Enhancement and Standardization of Climate-Related Disclosures for Investors,” in March 2024. The rule was designed to provide investors with standardized, comparable information about financially material climate-related risks, including physical risks from climate impacts and transition risks facing companies as the economy shifts. The final rule was weaker than the original proposal, including the removal of Scope 3 emissions disclosure requirements.

The rule has not taken effect due to legal challenges from corporate interests and their political allies. In August 2024, the Sierra Club and other organizations submitted an amicus brief in the Eighth Circuit defending the SEC’s authority to issue the rule. In February 2025, then-Acting Chair Mark Uyeda requested that the Eighth Circuit pause scheduled arguments while the Commission considered its position; in March 2025, the Commission voted to end its defense of the rule and indicated that removing the rule from the Code of Federal Regulations would likely require a public comment process; and in July 2025, the SEC confirmed it would not review or reconsider the rule while litigation continued.

During the rulemaking process, investors overwhelmingly supported federal climate disclosure requirements. According to an analysis by Ceres, hundreds of institutional investors — representing tens of trillions of dollars in assets under management — commented with near-unanimous support for standardized climate-related disclosures, including greenhouse gas emissions reporting.

As states and major global jurisdictions continue moving forward with climate disclosure requirements, rescinding the SEC rule would abandon the prospect of a consistent federal baseline for U.S. public companies.

About the Sierra Club

The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person’s right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.