The Securities and Exchange Commission on Friday proposed withdrawing the climate-related disclosure regulations finalized in 2024, describing them as a "dramatic overreach" of the agency's statutory authority. The proposed action targets rules that, had they taken effect, would have obliged public companies to report greenhouse gas emissions and climate-related risks in formal filings.
According to the SEC, the 2024 regulations would have required registrants to include climate-related information in registration statements and annual reports. The commission said the mandates were "unsound as a matter of policy" and exceeded limits on compulsory disclosures set by Congress.
The proposal to rescind the rule launches a 60-day comment period under File Number S7-2026-19. The SEC framed the rules as unnecessary and at odds with a registrant-specific, materiality-based disclosure framework, which the agency said better serves investors.
Under the 2024 requirements, companies would have been required to disclose: greenhouse gas emissions; how they manage climate-related risks; and the effects of severe weather events on financial statements. The SEC applied most of these obligations broadly to nearly all public companies, without differentiation by size, industry, or individual circumstances.
The commission also argued the obligations imposed substantial costs that were not justified by the informational benefits the rules would deliver. It said the mandates conflicted with policy goals of facilitating capital formation and encouraging firms to remain or become public companies.
In outlining the proposed withdrawal, the SEC stated that it expects market-driven exchanges of information between registrants and investors to continue after rescission. The 60-day comment window is the next procedural step in deciding whether to finalize the withdrawal.
Context and next steps
The proposal centers on the agency's view that the 2024 climate disclosure rules exceeded the statutory boundaries for mandatory disclosure and represented unsound policy. Stakeholders now have a 60-day period to submit comments under the designated file number, after which the commission will weigh responses before taking final action.