Last Friday, the Securities and Exchange Commission formally proposed to entirely rescind its rules that require companies to provide climate change related information in their registration statements and annual reports. While the contentious climate rules never took effect, the Commission’s proposal focuses on returning the agency to its core mandate and restoring a materiality focused approach to securities regulation.

Make no mistake, the proposed roll back marks among the most significant shifts in U.S. federal regulation, moving away from the Biden era prescriptive climate apocalypticism mandates returning to the flexible, objective “materiality” standard in making investment decisions.

“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,” said SEC Chairman Paul S. Atkins in a statement.

The Commission in March 2024 approved amendments to its rules under the Securities Act of 1933 and Securities Exchange Act of 1934 to mandate highly specific and granular disclosure from virtually all public companies about climate related matters such as greenhouse gas emissions (including originally requiring calculation of Scope 3 emissions), management of climate related risks, and the financial statement effects of severe weather events. These rules represented the most significant expansion of mandatory environmental disclosure in the history of U.S. securities regulation.

Within 60 days of the Commission’s adoption of those amendments, various parties petitioned for judicial review in multiple federal courts of appeals. On March 21, 2024, these petitions were consolidated for review in the U.S. Court of Appeals for the Eighth Circuit.

On April 4, 2024, the Commission stayed the new climate disclosure rules pending completion of consolidated litigation.

On March 27, 2025, the Commission voted to end its defense of the final rules. On Sept. 12, 2025, the Eighth Circuit issued an order holding the consolidated petitions for review in abeyance until such time as the Commission reconsiders the challenged rules by notice and comment rulemaking or renews its defense of the climate disclosure rules.

The Commission is now proposing to rescind the climate disclosure rules in their entirety because they exceed the scope of the agency’s statutory authority. Even if it had authority to adopt such final rules, the Commission now believes there are independent, compelling policy reasons to rescind them entirely:

• They are unnecessary and inconsistent with a registrant specific, materiality based approach to disclosure that best serves the interests of registrants and investors.
• They stray well beyond the policy concerns of the federal securities laws.
• They impose substantial costs on public companies and their shareholders that are not justified by the informational benefits they may provide to some investors.
• They are at odds with the Commission’s policy objectives of facilitating capital formation and promoting public company status.

Following the publication last week in the Federal Register, the public comment period on this action to rescind will remain open until August 3, 2026.

As a Fortune 50 CEO said last week, “By restoring the traditional materiality standard, the SEC’s proposal shifts the focus away from single issue advocacy and back to providing investors with the comprehensive information they need to make informed investment decisions. Apocalyptic global warming has all but ended, but this is about much more than that.”

While the SEC’s proposed rescission has been characterized as the final nail in the coffin of the SEC climate rule, state climate reporting laws with significant extra jurisdictional reach, such as California’s, and those targeting buildings, such as Maryland, continue to exist.

The rescission marks a significant shift in public policy, moving away from prescriptive apocalyptic climate securities law mandates toward a more reasoned, broader market driven materiality based approach.

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Join us for the next in our webinar series at the Intersection of Business, Science, and Law, “Environmental Issues in Commercial Leases” on Tues, June 16 at 9 am. The webinar is complimentary, but you must register here.