The SEC’s proposed rescission opens a 60-day public comment period and sets the stage for additional legal challenges, though the rule’s prospects for revival appear dim. The Trump administration’s broader deregulatory agenda, combined with recent Supreme Court rulings limiting the rulemaking authority of federal agencies, has reshaped the regulatory landscape for environmental disclosure.
The effort to require climate-related corporate disclosures began in earnest in 2010, when the SEC issued guidance suggesting that companies evaluate and disclose how climate change could affect their operations and assets. Other countries moved more aggressively, adopting mandatory disclosure frameworks, while voluntary climate reporting expanded steadily among large publicly traded firms.
Advocates pushed for federal requirements for years. Mindy Lubber, who heads the sustainability nonprofit Ceres, said in an interview that the pursuit of climate disclosure rules represented “more like a 20-year journey.” Lubber, an early campaigner for investor-focused climate reporting, began organizing support among institutional investors in the mid-2000s.
The Biden-era SEC escalated the effort in 2021, tightening existing climate guidance and preparing a formal rulemaking. When the commission asked for initial feedback on the concept, it received about 600 letters. The commission then released a draft rule in 2022 that employed 52 staffers and drew 4,500 substantive responses, excluding form letters and duplicate submissions.
The volume of commentary overwhelmed the agency at points. A computer glitch forced some respondents to resubmit their comments. The U.S. Chamber of Commerce alone filed 141 pages of arguments contending the proposal was overly burdensome for public companies.
By the time the commission finalized the rule in 2024, it totaled approximately 300,000 words — roughly the combined length of “Moby-Dick” and “The Sun Also Rises” — supported by more than 3,000 footnotes. The regulation would have required companies to report direct greenhouse gas emissions and evaluate climate-related risks ranging from new regulations to exposure to extreme weather events.
Paul Atkins, who serves as the current SEC chair, has long opposed the rule. As a private citizen and policy advocate before his appointment, he argued for a narrower definition of materiality in securities law, warning that extensive new disclosures could deter companies from pursuing initial public offerings.
Lawsuits assembled quickly after the rule’s 2024 finalization. Most of the litigation came from Republican state attorneys general, oil industry groups, and trade associations that argued the commission had exceeded its statutory authority under the Securities Exchange Act. Several environmental organizations filed suit separately, arguing the rule did not go far enough. The Sierra Club, for example, urged the commission to require companies to calculate emissions from their supply chains, not just their own direct operations.
The SEC stayed enforcement of the rule pending appellate review. After President Trump took office, the commission announced it would not defend the regulation in court. The move to formally terminate the rule began last week with the proposed rescission.
Even a formal rescission will not end the matter conclusively. The required 60-day comment period that followed the SEC’s proposal will generate another round of public submissions, and legal advocates on both sides have signaled they will pursue additional litigation regardless of the outcome. A final rescission would face the same appellate courts that were already considering challenges to the original rule.
Regulatory experts said a resurrection of mandatory climate disclosure appears unlikely under the current administration. The SEC’s deregulatory posture, the agency’s refusal to defend its own prior rule, and a series of Supreme Court decisions narrowing administrative authority converge on the same result.
The rule’s demise closes one chapter in the longest-running regulatory effort in the SEC’s modern history. What began as investor-led pressure for better risk data ended with a rule that consumed thousands of staff hours, generated more than 4,500 unique comments, and never governed a single corporate filing.