The Securities and Exchange Commission, now under full Republican control, formally proposed Friday to scrap its 2024 mandate that would have forced publicly traded companies to report climate-related risks and greenhouse gas emissions to investors.
The three Republican commissioners, who now hold every seat on the panel after Democrats lost the majority, issued a statement outlining their intent to eliminate the rule entirely. The move marks a decisive reversal of a key Biden-era climate policy and signals the agency’s shift toward a more business-friendly posture.
Originally approved when Democrats held a 3-2 majority, the rule would have required all publicly traded firms to disclose how climate change poses material risks to their operations. Large companies would also have had to report direct greenhouse gas emissions if that data could influence investment decisions.
At the time, former SEC Chair Gary Gensler argued the rule would empower investors to compare companies’ climate exposures and contributions, especially as extreme weather intensifies. The UN recently warned that the next five years will smash heat records and breach climate thresholds, underscoring the urgency of such disclosures for risk assessment.
But the current commission views the rule differently. In its statement, the SEC described the mandate as exceeding its statutory authority, unnecessary for securities law purposes, and unduly costly for businesses. The agency said it should focus on materiality—the principle that only information likely to affect an investor’s decision should be disclosed—rather than dictating corporate behavior.
“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,” SEC Chair Paul Atkins said in a statement.
The proposal to rescind the rule follows a pattern of regulatory rollbacks under the current administration. For instance, the EPA recently eased refrigerant rules, sparking debate over costs and climate impact, while doctors have warned that the EPA’s repeal of another climate rule ignores the chronic disease crisis. Critics argue such moves prioritize industry interests over investor protection and environmental accountability.
The SEC’s action is not unexpected. Last year, the commission voted to stop defending the 2024 rule against court challenges, and litigation has been paused while the agency reconsiders. The formal proposal to rescind effectively closes the door on mandatory climate disclosures at the federal level, at least for now.
Supporters of the rule say it provided essential transparency for investors navigating climate risks. Opponents, including business groups, argued it imposed burdensome compliance costs. With the Republican-led SEC now moving to scrap it entirely, the debate over climate risk in financial markets is far from over—but the regulatory landscape has clearly shifted.
