Securities And Exchange Commission Ends Defense Of Climate Disclosure Rule

The U.S. Securities and Exchange Commission (SEC) recently notified a federal court that it will cease its legal defense of regulations the SEC previously issued that would have required public companies to publicly disclose their greenhouse gas emissions and other climate-related information.

As Connecting the Dots  reported at the time, in March 2024, the SEC voted to enhance and standardize climate-related disclosures that must be issued by public companies and outlined in public offerings. Because of advocacy from members of the industrial metals and broader manufacturing industry, that final rule had excluded a requirement for companies to disclose Scope 3 emissions — those that come from companies in a manufacturer’s supply chain.

Nevertheless, compliance with the final rule still would have imposed substantial costs on manufacturers. As such, the regulation had been subject to several legal challenges that had been consolidated into one case that was waiting to be heard by the U.S. Court of Appeals for the 8th Circuit. That case now will no longer move forward.

As The Wall Street Journal explained, “By dropping its defense of the rules, the SEC is effectively walking away from the regulations it had established, despite not actually rescinding the rules.” Stay tuned to Connecting the Dots to see if the SEC, under the Trump administration, full rescinds the regulation.