SEC Formally Proposes Rescinding Climate Disclosure Rule, Deepening Retreat From Investor Protection

Proposal would leave investors with less information about climate risks while advancing legal theory that could weaken corporate disclosure more broadly

WASHINGTON, D.C. - The Securities and Exchange Commission today formally proposed rescinding its 2024 climate disclosure rule, moving forward with an effort to eliminate federal requirements for public companies to disclose standardized information about financially material climate-related risks and, for some companies, greenhouse gas emissions.

The rule, which has not taken effect amid litigation, was designed to provide investors with consistent, comparable information about climate-related financial risks facing public companies. The SEC's new proposal goes beyond rescinding the climate rule itself by advancing a sweeping view of the agency's disclosure authority that could weaken corporate transparency more broadly.

The proposal will be open for public comment for 60 days after publication in the Federal Register.

In response, Jessye Waxman, Sustainable Finance Campaign Advisor with the Sierra Club, issued the following statement:

"This proposal is not just a retreat from climate transparency. Under the Trump administration, the SEC is advancing a dangerous legal theory that could weaken corporate disclosure more broadly by narrowing the agency's ability to require standardized information about emerging risks that matter to investors. This is an attempt to make public markets less transparent, protect corporate polluters from basic accountability, and leave investors with less information about risks that are already reshaping the economy.

"Climate change is already creating material financial risks for companies, investors, and the broader economy, and the SEC should be requiring more transparency, not less. The SEC has clear authority to require climate-related disclosures from public companies, and investors need consistent, comparable, and decision-useful information to understand how companies are exposed to worsening climate impacts and the transition to a lower-carbon economy."

BACKGROUND

In March 2024, the SEC adopted the final rule, formally titled "The Enhancement and Standardization of Climate-Related Disclosures for Investors." The rule was designed to provide investors with standardized, comparable information about financially material climate-related risks, including physical risks from climate impacts and transition risks facing companies as the economy shifts. The final rule was weaker than the original proposal, including the removal of Scope 3 emissions disclosure requirements.

The rule has not taken effect due to legal challenges from industry groups and their political allies. In April 2024, the SEC stayed the rule pending judicial review. In August 2024, the Sierra Club and other organizations submitted an amicus brief in the Eighth Circuit defending the SEC's authority to issue the rule. In February 2025, then-Acting Chair Mark Uyeda requested that the Eighth Circuit pause scheduled arguments while the Commission considered its position; in March 2025, the Commission voted to end its defense of the rule; and in July 2025, the SEC confirmed it would not review or reconsider the rule while litigation continued. Today's proposal begins the public notice-and-comment process for rescinding the rule in full.

During the rulemaking process, investors overwhelmingly supported federal climate disclosure requirements. According to an analysis by Ceres, hundreds of institutional investors - representing tens of trillions of dollars in assets under management - commented with near-unanimous support for standardized climate-related disclosures, including greenhouse gas emissions reporting.

As states and major global jurisdictions continue moving forward with climate disclosure requirements, rescinding the SEC rule would abandon the prospect of a consistent federal baseline for U.S. public companies.

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About the Sierra Club

The Sierra Club is America's largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit https://www.sierraclub.org.