The U.S. Securities and Exchange Commission (SEC) announced that it will no longer defend its climate disclosure rules in court, effectively abandoning its regulatory requirement for companies to report on climate risks and greenhouse gas emissions—without formally rescinding the rules.

In a statement, SEC Acting Chairman Mark Uyeda, who opposed the original rule, described it as “costly and unnecessarily intrusive.” Uyeda was appointed Acting Chair after former SEC Chair Gary Gensler resigned in January following Donald Trump’s election. Trump’s nominee for SEC Chair, Paul Atkins, currently undergoing confirmation, has also voiced opposition to the climate disclosure requirements.

The climate disclosure regulations, introduced under Gensler’s leadership in March 2024, marked the first U.S. mandate requiring public companies to disclose climate risks, strategies to address them, financial impacts of extreme weather, and, in some cases, greenhouse gas emissions from operations.

The rule faced swift legal challenges, with nine court petitions filed within 10 days of its release. Among them was a lawsuit by 25 Republican state attorneys general, led by Iowa AG Brenna Bird, and an appeals court motion for a stay, spearheaded by the U.S. Chamber of Commerce.

The cases were consolidated in the Eighth Circuit, leading the SEC to pause implementation in April while reviewing legal challenges. At the time, the agency stated its intent to “continue vigorously defending” the rule. By August, the SEC had formally launched its court defense, arguing that the disclosures provided essential investment-relevant information and fell within the agency’s regulatory authority.

However, in its latest update, the SEC informed the court that it is withdrawing its defense and will no longer allow its legal team to argue in favor of the rule.

SEC Commissioner Caroline Crenshaw, a proponent of the disclosure requirements, criticized the decision, stating that the Commission is effectively “hoping to let someone else do their dirty work” by allowing the courts to strike down the rule instead of following proper procedures to amend or repeal it. She also emphasized that investor demand for climate-related disclosures remains strong.

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