In March 2024 the US Securities and Exchange Commission adopted rules requiring public companies to disclose certain climate-related risks and, for larger filers, material Scope 1 and Scope 2 greenhouse gas emissions. The rules were quickly challenged in court, and the SEC voluntarily stayed them pending litigation.
On 27 March 2025 the Commission voted to end its defence of the rules, withdrawing its arguments before the Eighth Circuit Court of Appeals. The decision effectively left the rules unenforced and in legal limbo.
What the rules would have required
The 2024 rules would have required disclosure of material climate-related risks, their actual and potential impact on strategy and outlook, governance and risk management processes, and certain financial statement effects of severe weather events above specified thresholds. Large accelerated and accelerated filers would have disclosed material Scope 1 and 2 emissions, with phased-in attestation.
Scope 3 emissions — those in the value chain — had already been dropped from the final rule after extensive opposition during consultation.
Why US companies still face climate reporting
The SEC's retreat does not remove climate disclosure from the agenda. California's climate laws, SB 253 and SB 261, require large companies doing business in the state to report greenhouse gas emissions and climate-related financial risks, with first reporting expected from 2026, subject to ongoing litigation and regulatory implementation.
US multinationals with significant EU operations may also fall within the CSRD, and investors continue to request climate information through frameworks such as the ISSB standards.
Existing disclosure obligations remain
The SEC's 2010 interpretive guidance on climate change disclosure remains in place. Companies must still disclose material risks, including climate-related ones, under existing requirements for risk factors, MD&A and the business description.
Practical takeaways
Companies should map their climate reporting obligations across jurisdictions rather than relying on a single regulator's stance, and maintain controls over emissions data used in voluntary reports, which can still attract liability if misleading.
Conclusion
The SEC's decision changed the federal picture, but not the underlying demand. For many companies, climate reporting is now driven by state law, foreign regulation and investor expectations rather than by a single federal rule.
