Overview
- The SEC on Friday proposed formally rescinding the 2024 climate-disclosure rule and opened a 60-day notice-and-comment period before any final action.
- The 2024 rule would have required public companies to report climate risks, board governance of those risks, select financial impacts, and Scope 1 and Scope 2 greenhouse gas emissions, but it never took effect after legal challenges and a court stay in April 2024.
- Chair Paul Atkins and the commission say the rule exceeded the agency’s statutory authority, conflicted with a materiality-based standard for investor disclosures, and imposed substantial costs on companies and shareholders.
- Investor-advocacy groups and environmental organizations say rescission will leave investors with inconsistent information and greater difficulty comparing companies, while business and conservative groups praise the move as deregulatory relief.
- Even if the SEC removes the federal rule, companies will still face state and international requirements such as California’s disclosure law and the EU’s CSRD, creating a patchwork of different standards and potential information gaps for investors.