Change in Climate: Proposed Rescission of SEC Climate Rule

In under a minute

• On May 29, 2026, the SEC issued a proposal to rescind the climate-related disclosure rules adopted in March 2024.
• The 2024 rules would have required disclosures in registration statements and annual reports about climate-related risks, greenhouse gas emissions for certain registrants, climate-related governance and risk management, targets and goals, and certain financial statement effects of severe weather events and other natural conditions.
• The SEC states that the proposed rescission is based on its view that the 2024 rules exceed the commission’s statutory authority and, independently, are not sound policy.
• Comments on the proposal are due Aug. 3, 2026.

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Background

On March 6, 2024, the SEC adopted climate-related disclosure rules that would have required public companies to provide certain qualitative and quantitative climate-related disclosures in annual reports and registration statements. Shortly after adoption, the rules were challenged in multiple courts, and the related petitions were consolidated in the U.S. Court of Appeals for the 8th Circuit on March 21, 2024. The SEC stayed the rules on April 4, 2024, pending the completion of judicial review.

Following a change in commission leadership, the SEC voted on March 27, 2025, to end its defense of the rules in the pending litigation. On Sept. 12, 2025, the 8th Circuit held the litigation in abeyance until the SEC either reconsidered the rules through notice-and-comment rulemaking or renewed its defense.

Proposal to rescind climate disclosure rules

On May 29, 2026, the SEC issued a proposal to rescind the 2024 climate-related disclosure rules in their entirety. The proposal would withdraw the previously adopted but not yet effective climate-related amendments to Regulation S-K, Regulation S-X, Regulation S-T, and related Securities Act and Exchange Act forms and rules. If adopted as proposed, registrants would not be required to provide the climate disclosures contemplated by the 2024 rules, including greenhouse gas emissions attestation requirements for certain filers.

According to the proposing release, the SEC believes the climate disclosure rules exceed the statutory limits of its disclosure authority. The commission also cites several policy reasons for rescission, including that the rules are unnecessary and inconsistent with a registrant-specific, materiality-based disclosure framework; extend beyond the core purposes of the federal securities laws; impose costs that might not be justified by the related informational benefits; and conflict with the commission’s objectives of facilitating capital formation and promoting public companies to remain or become public.

Crowe observation: The proposal would not eliminate existing requirements to evaluate material disclosure matters under current SEC rules and regulations, and it would not directly alter climate reporting requirements governed by laws outside of federal securities statutes (for example, the European Union’s Corporate Sustainability Reporting Directive and California’s Climate-Related Financial Risk Act and Climate Corporate Data Accountability Act).

What’s next

The proposal remains subject to public comment, with comments due Aug. 3, 2026.

Crowe observation: The proposed rescission is still pending completion of the SEC’s notice-and-comment process and has not yet been finalized. More than 24,000 comment letters including about 4,500 unique submissions were received before the 2024 climate-related disclosure rules were adopted. This suggests that the proposal might continue to attract substantial interest from registrants, investors, and other stakeholders.