In a development that could hardly be termed unexpected, the Trump Administration SEC has begun the process of unraveling the climate disclosure rule promulgated by the SEC under the Biden Administration. Specifically, the Acting Chair of the SEC--Mark Uyeda, who had dissented from the adoption of the climate disclosure last year--issued a statement signaling that the SEC would soon reverse its position on the climate disclosure rule. Highlighting “the recent change in the composition of the Commission, and the recent Presidential Memorandum regarding a Regulatory Freeze,” Uyeda announced that he would ask the Eighth Circuit--where all of the legal challenges to the climate disclosure rule have been consolidated--to take no action until “the Commission [] deliberate[s] and determine[s] the appropriate next steps.” Such “next steps” could likely involve the SEC no longer defending the validity and legality of the climate disclosure rule.
Despite the significance of this development--effectively, the beginning of the end of one of the Biden Administration's signature regulatory achievements--this move was widely expected and is unlikely to have much practical impact. Ever since the election of President Trump in 2024, it was anticipated that the SEC climate disclosure rule would not long survive the changed administration. And even before then, due to the substantive legal challenges to the regulation, a number of scholars had opined that the climate disclosure rule was imperiled. Further, the impact of Uyeda's announcement is even further diminished since the enforcement of the climate disclosure rule had already been voluntarily stayed by the SEC pending the resolution of the legal challenges--so there was not any currently binding regulation applicable to reporting entities.
However, despite the likely demise of the SEC climate disclosure rule, there are mandatory climate disclosure regulations that will apply to many U.S. companies still on the books--as both California and the European Union have issued such regulatory requirements.
The SEC’s interim leader on Tuesday began unraveling the agency’s legal defense of Biden-era climate reporting rules for public companies. Mark Uyeda, acting chairman of the US Securities and Exchange Commission, announced the agency would ask the US Court of Appeals for the Eighth Circuit not to schedule arguments in the case brought by business interests and Republican state attorneys general. The commission needs time to “deliberate and determine the appropriate next steps,” Uyeda said.
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