SEC Proposes Rescission of Climate-Related Disclosure Rules

The U.S. Securities and Exchange Commission (SEC) has formally proposed the complete rescission of its climate-related disclosure rules, which were originally adopted in March 2024 [1]. The proposal marks a significant shift in the agency's regulatory approach, moving away from the previous administration's mandate for public companies to report specific climate risks and greenhouse gas emissions [1].

Key takeaways

• The SEC voted on May 29, 2026, to propose the total rescission of the climate disclosure rules [1].
• The agency argues the rules exceeded its statutory authority and imposed costs on companies that were not justified by investor benefits [1].
• The proposal follows the Supreme Court’s Loper Bright decision, which removed the Chevron deference doctrine and increased the legal vulnerability of the rules [1].
• Public companies must still comply with existing Regulation S-K requirements to disclose material climate-related risks [1].
• A 60-day public comment period will follow the publication of the proposal in the Federal Register, with a final vote expected later in 2026 [1].

A Shift in Regulatory Philosophy

The move to scrap the rules follows a period of intense legal scrutiny. After the 2024 rules were adopted, they faced multiple challenges in federal courts, leading the SEC to voluntarily stay the requirements and eventually withdraw its legal defense [1]. The current Commission leadership, including Commissioners Atkins, Mark Uyeda, and Hester Peirce, has expressed consistent opposition to the mandate, citing concerns that it strayed from the agency's traditional, materiality-based disclosure framework [2].

In its proposal, the SEC stated that the rules were inconsistent with the agency's objectives of facilitating capital formation and encouraging companies to remain public [2]. Commissioner Hester Peirce noted that the mandates imposed significant burdens on registrants without providing corresponding benefits to investors [1]. The Commission further argued that existing disclosure obligations under Regulation S-K already require companies to report climate-related information if it is material to their business, strategy, or financial condition [1].

Implications for Corporate Compliance

While the SEC moves toward rescission, the regulatory environment remains complex for public companies. The agency emphasized that the proposal is not yet final, and companies should avoid prematurely dismantling their compliance infrastructure [1]. Furthermore, the potential federal rescission does not remove all climate reporting obligations. Companies with international operations may still face requirements under the European Union’s Corporate Sustainability Reporting Directive, and some state-level mandates, such as those in California, remain in flux [1].

Looking ahead, the SEC will accept public comments for 60 days once the proposal is published in the Federal Register [1]. During this time, companies are encouraged to evaluate how the potential removal of these rules will impact their broader environmental, social, and governance (ESG) reporting strategies [1]. Even without a federal mandate, institutional investors may continue to request climate data through voluntary frameworks, such as those monitored by the International Sustainability Standards Board [1].