Statement Summary
The Commission has proposed to rescind the 2024 Climate Rules, which mandated enhanced climate-related disclosures for investors. These rules, adopted amidst substantial controversy, faced numerous legal challenges questioning the Commission’s authority and policy justification. The Commission paused the enforcement of these rules pending judicial review and subsequently withdrew its defense in court. Amid concerns regarding compliance with statutory authority and the soundness of these rules, the Commission emphasizes the need to reassess disclosure mandates. The proposal to rescind the rules aims to evaluate the costs and benefits of corporate disclosure requirements, ensuring that future obligations are aligned with the Commission’s authority and focus on materiality. Public comments are being sought for further consideration.
Original Statement
Today, the Commission proposed to rescind in their entirety the rules on The Enhancement and Standardization of Climate-Related Disclosures for Investors, which the Commission adopted on March 6, 2024 (the “2024 Climate Rules”). The 2024 Climate Rules generated national controversy since they were first proposed. Some commenters supported the proposal, but many argued that the 2024 Climate Rules, as proposed, were outside the scope of the Commission’s authority and were flawed for policy reasons.
The Commission proceeded to adopt the 2024 Climate Rules, but the controversy continued. Various legal challenges to the rules were filed and consolidated in the Eighth Circuit. Similar to many comments on the proposal, challengers of the adopted 2024 Climate Rules raised authority and administrative procedure arguments and called for the court to vacate the rules. The Commission then stayed the 2024 Climate Rules pending the completion of judicial review of the cases in the Eighth Circuit.
In March 2025, the Commission withdrew its defense of the 2024 Climate Rules in the litigation. The court later held the case in abeyance.
I have been concerned about the 2024 Climate Rules for some time because of questions raised about the Commission’s authority to adopt them and the soundness of the policy basis to support them.
Careful compliance with the statutes governing the exercise of the Commission’s authority and a comprehensive effort to review and reshape the current SEC public company disclosure requirements are key components of my agenda, and I believe serious consideration must be given to rescission of the 2024 Climate Rules to help accomplish both of those goals.
We must re-examine the costs, burdens, and benefits of disclosure mandates to make becoming and remaining a public company more attractive again. SEC disclosure obligations should comply with the Commission’s statutory authority, be guided by materiality as the North Star, avoid the practical effect of dictating corporate behavior, and be imposed only when the expected benefits justify the likely costs and burdens.
The proposing release to rescind the 2024 Climate Rules identifies, discusses, and reflects the Commission’s preliminary views on these issues. It also requests public comment, which I look forward to reviewing and considering.
Thank you to the following members of the Commission staff for their work on the rescission proposal:
- Office of the General Counsel: J. Russell McGranahan, Jeffrey Johnson, Jeffrey Finnell, Bryant Morris, Tracey Hardin, Daniel Staroselsky, Leila Bham, Evan Jacobson, John Rady, and David Russo
- Division of Economic and Risk Analysis: Joshua White, Oliver Richard, Lyndon Orton, Charles Lin, Aysa Dordzhieva, Ardith Spence, Lauren Moore, Charles Woodworth, Samantha Croffie, and Joseph Luckett
- Division of Corporation Finance: Jim Moloney, Sebastian Gomez Abero, Luna Bloom, Valian Afshar, and Joshua Gorsky
- Office of the Chief Accountant: Kurt Hohl, Shehzad Niazi, and Erin Nelson
