On May 29, 2026, the SEC voted unanimously to propose rescinding in their entirety the climate-related disclosure rules adopted by a 3-2 vote in March 2024 (the Climate Rules). Chairman Paul Atkins framed the action around materiality, stating that SEC disclosure obligations should be “guided by materiality as the North Star” and “imposed only when the expected benefits justify the likely costs and burdens.”
The Climate Rules, which would have mandated reporting on climate risks, Scope 1 and 2 greenhouse gas emissions, transition plans, and financial statement footnotes for severe weather events, never took effect. Immediately upon adoption, trade associations, state attorneys general, and business groups challenged the Climate Rules, with litigation consolidating in the Eighth Circuit (Iowa v. SEC, No. 24-1522). The Commission stayed the Climate Rules on April 4, 2024, and they have remained inoperative since.
Timeline of Key Events
The path to this proposed rescission includes several notable milestones. In February 2025, Acting SEC Chairman Mark Uyeda directed Commission staff to request that the Eighth Circuit refrain from scheduling oral arguments and outlined his concerns about the Commission’s statutory authority to adopt the Climate Rules. On March 27, 2025, the Commission voted to withdraw its defense of the Climate Rules, with Commissioner Caroline A. Crenshaw dissenting. Following the SEC’s withdrawal, a coalition of 18 states and the District of Columbia intervened to uphold the Climate Rules. On September 12, 2025, the Eighth Circuit issued an order holding the consolidated petitions for review in abeyance until such time as the Commission reconsidered the Climate Rules through notice-and-comment rulemaking or renewed its defense.
The Commission has now taken the step contemplated by that order, proposing to rescind the Climate Rules through a formal notice-and-comment rulemaking.
Meanwhile, climate disclosure requirements continue to advance at the state level. In February 2026, the New York State Senate passed the Climate Corporate Data Accountability Act, which is legislation modeled in significant respects on California’s climate disclosure laws. The bill remains pending before the New York Assembly.
Rationale for Rescission
The Commission now believes the 2024 Climate Rules “were a dramatic overreach of the Commission’s statutory authority and, independently, unsound as a matter of policy.” Even assuming it had authority to adopt the Climate Rules, the Commission identifies independent policy grounds for rescission: the Climate Rules are inconsistent with a registrant-specific, materiality-based disclosure framework; they stray beyond the policy concerns of the federal securities laws; they impose substantial costs not justified by informational benefits; and they conflict with the Commission’s objectives of facilitating capital formation and promoting public company status.
Commissioner Uyeda, in his supporting statement, emphasized that the concept of materiality, including as it relates to climate change, is already well embedded in the SEC’s existing disclosure obligations, whether in the description of the business, risk factor disclosure, management’s discussion and analysis, financial statements, or notes thereto. He characterized the Climate Rules as “a rule to influence how a business operates hidden under a cloak of disclosure.”
Commissioner Hester Peirce likewise supported the proposal, noting that adherence to a merit-neutral, materiality-centered disclosure framework is consistent with both the SEC’s statutory authority and the healthy functioning of U.S. capital markets. The Commission’s proposing release, Release No. 33-11421, sets forth the legal and policy bases for rescission in detail.
Next Steps
The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register. Given that the original 2022 climate proposal generated more than 16,000 public comments, a similarly robust comment process is anticipated. After reviewing public comments, the Commission would be required to vote again before the rescission could become final.
In the meantime, the Climate Rules remain in place and have never been operative. As discussed in the accompanying Client Alert, companies should not assume that the absence of federal climate disclosure mandates means the end of climate-related reporting obligations. California’s SB 253 and SB 261, New York’s proposed Climate Corporate Data Accountability Act, the European Union’s Corporate Sustainability Reporting Directive, and various international standards under the International Sustainability Standards Board framework continue to advance. As a result, many public and private companies may remain or become subject to climate-related reporting obligations regardless of what the SEC ultimately does.
We will continue to monitor developments and provide updates as the SEC’s rulemaking process unfolds. Read a more detailed analysis of this update on the Duane Morris LLP website.