United States: Unsustainable—Acting SEC Chairman Signals Reconsideration of Climate Risk Disclosure Rules
By: Lance C. Dial and Julie F. Rizzo
In March 2024, the SEC adopted The Enhancement and Standardization of Climate-Related Disclosures for Investors final rule, which required companies to make disclosures regarding climate risks and disclosures of Scope 1 and 2 emissions information (the Climate Risk Reporting Rule). The Climate Risk Reporting Rule was promptly challenged by several lawsuits that were ultimately consolidated in the Eighth Circuit Court of Appeals.
With the change in presidential administration, it has been widely expected that the Climate Risk Reporting Rule would be rescinded and that the SEC, under new leadership, could alter its litigation strategy. On 11 February 2025, Acting SEC Chairman Uyeda did just that. He issued a statement noting that, due to “changed circumstances,” he had directed the SEC staff to request that the Eighth Circuit delay the litigation to provide time for the SEC to “deliberate and determine the appropriate next steps in these cases.” In his statement, he noted that both he and Commissioner Peirce (who now represent a majority of the SEC Commissioners) had voted against the Climate Risk Reporting Rule, and he explained his concerns regarding whether the SEC had the statutory authority to adopt the rule, the necessity of the rule, and whether the SEC had followed the appropriate procedures required under the Administrative Procedure Act.
In response to the statement put out by Acting Chairman Uyeda, Commissioner Crenshaw released a statement that the SEC did not act outside of its remit by passing the Climate Risk Reporting Rule and that Acting Chairman Uyeda acted without the full Commission’s input in making this decision.
While Acting Chairman Uyeda’s statement does not necessarily have a practical impact on the rule itself, it is an affirmative signal that this Commission is not supportive of the Climate Risk Reporting Rule and will likely take future action to rescind it. This statement, coupled with earlier statements from Paul Atkins, the President’s nominee for SEC Chairman, that were critical of the Climate Risk Reporting Rule, likely serve as confirmation of the expectations that the Climate Risk Reporting Rule will not go into effect.