In a sweeping step to roll back climate-focused regulations implemented during the Biden administration, the U.S. Securities and Exchange Commission (SEC) announced Friday a formal proposal to scrap a landmark rule requiring certain publicly traded companies to disclose their greenhouse gas emissions and detail the financial risks they face from global warming.
The climate disclosure mandate has been frozen in legal limbo since last year, after the SEC’s new Republican majority paused its legal defense of the rule amid multiple lawsuits filed by industry groups and Republican state attorneys general. In its official statement announcing the proposal, the commission argued the rule must be rescinded entirely because it oversteps the agency’s legal authority granted by Congress. The 2024 finalized rule, the SEC added, imposes steep, disproportionate costs on public companies and their shareholders that cannot be justified by the limited informational benefits it might deliver to a subset of investors.
SEC Chairman Paul Atkins emphasized that eliminating the rule will prevent the agency from indirectly coercing corporate climate policy choices, and will uphold the commission’s commitment to only enacting regulations where projected benefits clearly outweigh the associated costs and burdens.
The proposed repeal is part of a far broader series of environmental deregulatory actions launched during the second term of President Donald Trump. The Environmental Protection Agency (EPA), led by Administrator Lee Zeldin, has already scrapped major federal climate programs, canceled billions of dollars in Biden-era environmental justice grants, and revoked the foundational scientific finding that has served as the legal backbone for U.S. greenhouse gas regulation for decades. Zeldin has framed these actions as striking a decisive blow against what he calls “climate change religion.”
Critics of the SEC’s proposal, however, warn that rolling back the disclosure rule will leave investors without the standardized, material data they need to accurately evaluate climate-related financial risks to their holdings. Kathy Fallon, director of land systems at the non-profit environmental advocacy group Clean Air Task Force, noted that while the 2024 rule was not perfect, it represented a critical step toward delivering consistent, transparent information to investors about financially material climate risks, including the use of carbon offsets. Fallon called on the commission to keep the rule in place and enforce disclosure requirements that meet the transparency needs of both investors and the general public.
Democratic Massachusetts Senator Ed Markey, a longstanding proponent of the climate disclosure mandate, called the SEC’s announcement the end result of years of lobbying by corporate polluters aimed at weakening and dismantling protections that safeguard investments from high-risk business models. Markey stressed that the SEC’s core mission is to protect Americans’ retirement savings, union pensions, and personal investments, not put those assets at risk by shielding companies whose profitability relies on unregulated pollution and exposure to climate volatility. Tom Zimpleman, an attorney with the Natural Resources Defense Council, echoed this criticism, arguing the commission is abandoning its statutory responsibility to protect investors by ignoring the reality that climate risk is inherently financial risk.
The SEC first approved the 2024 climate disclosure rule in a party-line vote, when the commission had a Democratic majority: three Democratic commissioners supported the rule, while two Republicans opposed it. Today, the commission holds three Republican members (including Chairman Atkins) and no Democratic appointees. When the rule was being developed, it became one of the most anticipated regulatory actions in recent history from the nation’s top financial regulator, drawing more than 24,000 public comments over two years from companies, auditors, lawmakers, and industry trade groups. At the time of its finalization, the rule aligned U.S. regulatory standards with the European Union and California, both of which have already implemented similar mandatory corporate climate disclosure requirements.
A 60-day public comment period will open after the repeal proposal is published in the Federal Register, which is expected to occur in the coming days.