SEC continues to remain tight-lipped about its intentions regarding the enforcement of Climate Change Disclosure Rule in case the ongoing lawsuit against it is unsuccessful.
In a recent development, the U.S. Securities and Exchange Commission (SEC) has asked the U.S. Court of Appeals to rule on petitions filed against its climate disclosure rules for companies. The SEC's July 2025 status report to the U.S. Court of Appeals for the Eighth Circuit reveals that the Commission is not reviewing or reaffirming the rule at this time, and it has ended its defense of the rule in litigation.
The climate disclosure rules, which require public companies in the U.S. to provide disclosure on climate risks, plans to address those risks, the financial impact of severe weather events, and, in some cases, greenhouse gas emissions originating from their operations, have faced immediate legal challenges following their release in March 2024. Nine court petitions were filed within 10 days, including a lawsuit against the rule filed by 25 Republican state attorneys general.
The SEC's decision not to review or reconsider the final climate disclosure rule has been met with criticism from Commissioner Caroline Crenshaw, who has accused the agency of being wholly unresponsive and trying to avoid its legal obligations under the Administrative Procedure Act. Crenshaw remains the lone current Democratic commissioner supporting the climate rule after other Democratic supporters left the Commission.
Mark Uyeda, Acting Chairman of the SEC, had previously declared that the Commission would end its legal defense of the rules. The petitions were consolidated in the Eighth Circuit court, with the court's decision likely to have a significant impact on the future of the rules.
Crenshaw's statement suggests that the Commission is not being transparent about its intentions regarding the climate disclosure rules. Her criticism of the SEC's response to the court's question indicates a potential divide within the Commission regarding the climate disclosure rules. Crenshaw's statement also implies that the Commission is not committed to defending the climate disclosure rules.
As of late July 2025, the SEC has neither upheld nor rescinded the climate disclosure rules but has deferred to the court for a decision while remaining noncommittal on future Commission action. The rules remain stayed, and litigation is ongoing in the Eighth Circuit.
References:
- SEC Asks Court to Rule on Climate Disclosure Rules
- SEC Drops Defense of Climate Disclosure Rules
- SEC Status Report on Climate Disclosure Rules
- Crenshaw Criticizes SEC's Response to Climate Disclosure Rules
- The climate disclosure rules, which lie at the intersection of science, environmental-science, and policy-and-legislation, have sparked controversy in the business and finance industry, given their demand for companies to disclose climate-change risks and relevant measures.
- The SEC's decision to halt the review and reaffirmation of these rules, as well as its withdrawal from litigation, has been met with criticism from Commissioner Caroline Crenshaw, whose critique implies a possible disconnect within the Commission regarding the rules.
- Despite the SEC's non-committal stance, the ongoing litigation in the Eighth Circuit court and Crenshaw's statements suggest that the rules are still being debated in general-news, politics, and regulatory circles.
- These climate disclosure rules, by requiring companies to address climate risks, plans, impacts, and emissions, aim to improve corporate accountability, especially in the face of mounting climate-change challenges.
- In light of the SEC's deferral to the court, the U.S. Court of Appeals' ruling will have far-reaching implications for climate reporting, corporate accountability, and the broader effort to mitigate climate-change within the U.S. and globally.
