The US Securities and Exchange Commission (SEC) has formally proposed to scrap climate disclosure rules for corporates, likely the final nail in the coffin of the Biden-era rules under the current Trump administration.
The SEC started developing mandatory climate-related disclosure under then president Joe Biden and the final rules – substantially watered down from original plans – were published in March 2024.
Legal challenges quickly followed, however, and the rules were put on hold.
Following Donald Trump’s return to the presidential office, in March 2025 the regulator announced it had voted to discontinue its defence of the rules. It did, however, ask the federal appeals court to lift the stay on the litigation so the court could address arguments about whether the SEC had authority to issue such rules. Some parties wanted the case to be held in abeyance.
In September last year the federal appeals court said the SEC would need to come clean on whether the rules would be rescinded, repealed, modified, or defended.
On Friday, the regulator said it had proposed the rescission of the rules in their entirety because “they exceed the scope of the agency’s statutory authority”.
However, it said that even if it had the authority, it believed there were “independent, compelling policy reasons to rescind them entirely”, such as they were overly burdensome and costly as well as “unnecessary and inconsistent with a registrant-specific, materiality-based approach to disclosure that best serves the interests of registrants and investors”.
Rescinding the rules would mean that there is no mandatory standardised climate-specific reporting regime in place for corporates, including ISSB standards, in the US at a federal level; California has a Scope 1 and Scope 2 emissions reporting law in place, although a bill requiring climate-related financial risk disclosure was halted following a court decision in November 2025.
There is a 60-day public comment period on the SEC’s proposed rescission of the rules.
