Statement of Commissioner Mark T. Uyeda on the Rescission of Climate-Related Disclosure Rules

Today, the Commission proposes to rescind amendments to its rules under the Securities Act of 1933 and Securities Exchange Act of 1934 that require registrants to provide certain climate-related information in their registration statements and annual reports (the "Climate Rescission Proposal" and the "Climate Rule," respectively).[1] The Climate Rescission Proposal identifies important policy reasons for rescinding the Climate Rule and discusses the questionable premise underlying the Commission's purported statutory authority for the Climate Rule.

This proposal represents a step towards refocusing our efforts on what matters most to investors: financial materiality.[2] As investors noted, in response to one survey, "future growth for the investment [being] strong" was the number one reason for buying an investment.[3] This is not surprising-investments are made to generate financial returns, not as charitable gifts. While investors are not a monolithic group-each may have different social, political or environmental preferences-the Commission's focus must remain anchored in material financial and business disclosures, which is precisely what Justice Thurgood Marshall described in TSC Industries v. Northway.[4]

The federal securities laws were designed so that investors are provided material disclosure by companies seeking to raise capital from investors and access the public market.[5] The federal securities laws are not general business conduct laws and were never intended to be an amorphous tool to elicit environmental and social policy changes.

Unfortunately, the Climate Rule was never about financial materiality. If it had, an impartial observer would have recognized that the concept of materiality-including climate change-is already well embedded in the SEC's disclosure obligations, whether in the description of the business, risk factor disclosure, management's discussion and analysis, financial statements, and notes to the financial statements.[6] Instead, the Climate Rule was, for all intents and purposes, a rule to influence how a business operates hidden under a cloak of disclosure.

When the Climate Rule was adopted, I did not support it.[7] The rule was the culmination of efforts by various special interests to hijack and weaponize the federal securities laws for their own climate-related goals. Regrettably, the Commission ventured outside of its expertise and set about using its disclosure regime as a means for driving political and social change. This approach was problematic and risked eroding the Commission's effectiveness and credibility as a financial regulator.

Lastly, the Climate Rule was not well-grounded in statutory authority, which I noted then, and which the Commission addresses today. Even without addressing the major questions doctrine and concerns about statutory authority, the Commission conducted a flawed process by failing to re-propose the rule after significant deviations from the original proposal, raising the question of whether appropriate notice was provided under the Administrative Procedure Act.

The Climate Rule was challenged in the courts by private and public parties. The litigation was consolidated in the Eighth Circuit (Iowa v. SEC, No. 24-1522 (8th Cir.)), and the Commission previously stayed effectiveness of the rules pending completion of that litigation. In March 2025, the Commission voted to end its defense of the indefensible Climate Rule.[8] The Court of Appeals carefully considered these implications, and today, the Commission seeks to address the court's concerns, minimizing the need for future judicial review.

The Climate Rule should serve as a cautionary tale to financial regulators that their expertise is narrow and their authority is not without limit. We should focus our regulations on matters within our areas of core competency and not attempt to interject our subjective judgment on topics minimally related to that which the legislature has tasked us to oversee. If Congress had wanted the Commission to regulate environmental emissions and other non-financial issues, then Congress knows how to direct the Commission to do so.[9]

I thank the staff in the Division of Corporation Finance, the Office of the Chief Accountant, the Division of Economic and Risk Analysis, and the Office of the General Counsel and the many other offices that have contributed to this release. I look forward to hearing the views of market participants and other impacted parties on these issues.