The U.S. Securities and Exchange Commission is no longer just stepping back from enforcement of its controversial climate disclosure rules — it is now actively moving to erase them.
The clearest sign came this month, when the SEC formally submitted a proposal to rescind the rules to the White House Office of Information and Regulatory Affairs, the first major procedural step in undoing a federal regulation. The move signals that the agency has shifted from simply pausing implementation to pursuing a full repeal.
That latest action follows more than a year of steady retreat.
In March 2025, the SEC voted to stop defending the rules in federal court, effectively abandoning the agency’s legal fight to preserve them. The Commission informed the U.S. Court of Appeals for the Eighth Circuit that its lawyers were no longer authorized to argue in favor of the regulation.
“The goal of today’s Commission action … is to cease the Commission’s involvement in the defense of the costly and unnecessarily intrusive climate change disclosure rules,” said Mark Uyeda, who was acting chairman of the SEC at the time.
Tied up in Court
That decision was especially significant because the rules had already been tied up in litigation almost immediately after they were adopted. Republican-led states, business groups, and industry organizations challenged the regulations, arguing that the SEC had exceeded its authority and imposed costly disclosure requirements unrelated to traditional securities regulation. Environmental groups, meanwhile, criticized the final version for not going far enough.
After the legal challenges piled up in 2024, the SEC voluntarily stayed the rules while the court cases proceeded. But once the agency stopped defending the rule in 2025, the future of the regulation became increasingly doubtful.
The courts then effectively pushed the issue back to the SEC. In a 2025 order, the Eighth Circuit said it was up to the Commission itself to decide whether the climate rules would be “rescinded, repealed, modified, or defended.” That ruling appears to have accelerated the agency’s move toward formal repeal.
The climate disclosure rules were originally finalized in March 2024 under former SEC Chair Gary Gensler after nearly two years of debate and revisions. The regulations were intended to require public companies to disclose material climate-related risks and certain greenhouse gas emissions information in annual filings. Supporters argued investors increasingly wanted consistent information about how climate change could affect corporate operations and financial performance.
The final rule was significantly narrower than the original proposal. Most notably, it dropped mandatory Scope 3 emissions reporting, which would have required companies to account for indirect emissions generated throughout their supply chains and product use. Even so, the rules still faced intense political and corporate opposition.
Now, under the Trump administration and new SEC leadership, the agency has embraced a far different philosophy. For public companies, the practical message is increasingly clear: the SEC’s federal climate disclosure regime is unlikely to survive.
That does not mean climate reporting requirements are disappearing entirely. California is still pursuing its own disclosure laws, and international frameworks — especially in the European Union — continue to push companies toward broader sustainability reporting. But at the federal level, the SEC appears determined to close the book on one of the most ambitious climate transparency efforts ever attempted by the agency. 
Josseph McCafferty is editor & publisher or Internal Audit 360°