SEC announces it will not defend climate disclosure rule

The Securities and Exchange Commission (SEC) announced Tuesday that it will not defend a year-old rule requiring publicly held companies to disclose climate-related risks and in some cases the details of their emissions.

"The Rule is deeply flawed and could inflict significant harm on the capital markets and our economy," acting SEC Chair Mark Uyeda said in a statement.

The SEC rule, finalized in March 2024, required emissions disclosures in cases when that information might affect an investment decision. It passed 3-2 along party lines, with Uyeda one of the two Republican votes opposed to it.

The rule represented a major compromise from the original 2022 SEC proposal, which would have required all public companies to disclose their direct emissions and in some cases required further information about indirect emissions within the supply chain.

The final rule also scrapped a requirement to disclose emissions created by their products after they sold them. This could have had major implications for fossil fuel companies in particular, as it would have mandated that they spell out the emissions associated with burning oil and gas.

The emissions disclosure requirements for the final rules would have kicked in starting in fiscal 2026 for large companies and 2028 for midsize firms.

Sen. Mike Rounds (R-S.D.), a member of the Senate Banking Committee, hailed the SEC decision in a social media post Tuesday: “The SEC’s overreaching climate rule would have burdened farmers, ranchers and small businesses with costly reporting requirements and red tape. I’m glad to see it revoked today.”

The SEC move marks the latest by the Trump administration to unwind the Biden administration’s rules on environmental and energy policy.

Many of the rollbacks and reversals have come through the Interior Department and Environmental Protection Agency, but last week the Transportation Department also announced it would suspend the $5 billion electric vehicle charger program funded under the Bipartisan Infrastructure Law.

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