Securities Regulation Daily Wrap Up, PUBLIC COMPANY REPORTING AND DISCLOSURE—SEC moves to rescind controversial climate disclosure rules, (May 7, 2026)
In a message to the Eighth Circuit Court of Appeals, the agency said that it has submitted a proposed rule that would rescind the 2024 final rules.
In a letter to the clerk of the Eighth Circuit Court of Appeals, the SEC indicated that it has drafted a proposed rule that would rescind the climate-related disclosure rules. The Commission said that the proposal, which was submitted for review earlier this week to the U.S. Office of Information and Regulatory Affairs, addresses “legal and policy concerns about the rules, including concerns that the rules exceed the Commission’s statutory authority and the costs of the rules outweigh their benefits.”
The Eighth Circuit had been holding in abeyance numerous legal challenges to the rules until the SEC agreed to reconsider the rules by notice-and-comment rulemaking, or renewed its defense of the rules. In its May 7 letter to the court, the Commission said that it does not intend to renew its defense of the rules, and advised that it will keep the Eighth Circuit informed of material developments in the proposed rulemaking.
Adoption and challenges. The SEC adopted final rules in March 2024 to impose new climate-related disclosures relating to greenhouse gas emissions, risk, governance, and business impact. The rules were adopted by a 3-2 vote amid strong opposition and were quickly challenged by 25 states and others who argued that the SEC exceeded its regulatory authority The actions were consolidated in the Eighth Circuit.
The SEC initially defended its rules but changed course following the January 2025 change in leadership. Eighteen states plus the District of Columbia who support the rule as intervenors in the action asked the court to hold the petitions for review in abeyance.
Challenges on hold. The Eighth Circuit initially granted the motion to hold the petitions in abeyance in April 2025. At that time the court directed the Commission to indicate whether it intended to review or reconsider the rules. The SEC responded that it did not, and asked the court to terminate the abeyance, continue considering the parties’ arguments, and exercise its jurisdiction to decide the matter.
The SEC argued at the time that if it were to undertake a new rulemaking, it would likely land in the courts of appeals, and many of the same legal arguments would come up. In the agency’s view an Eighth Circuit decision would have conserved judicial, agency, and public resources.
“It is possible the Commission would engage in further action relating to the rules,” the SEC wrote. “That could include a direction from the Chairman to the staff to develop recommendations to present to the Commission to replace, rescind, or modify the rules, but the outcome of the litigation and the reasoning of the Court will bear heavily on the Commission’s next steps with the rules.”
The court replied in September that it would continue to hold the petitions in abeyance until such time as the SEC took further action on the rules.
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