SEC Climate Disclosures Rules One Step Closer to the Grave; GHG Emissions Disclosures One Step Closer to Becoming a Multi-State Compliance Issue
The slow death of the Securities and Exchange Commission’s (SEC) climate disclosure rules continued on March 27, 2025, with the SEC Commissioners voting to discontinue the defense of such rules before the Eighth Circuit, Iowa v. SEC, No. 24-1522 (8th Cir.), which is where the numerous complaints challenging the rules were consolidated.[1] The SEC’s action does not withdraw or terminate the rules, but while they remain in place, the SEC’s previous stay of the rules continues. It will be interesting to see if the Democratic attorneys general from a number of states who joined the litigation in support of the rules will continue to defend the rules without the SEC’s support.
While the SEC has made clear that it will not be pursuing its climate disclosure rules[2], companies may still need to comply with climate disclosure laws of other jurisdictions, including the European Union’s Corporate Sustainability Reporting Directive and California’s climate disclosure rules. In addition, legislation similar to California’s “Climate Corporate Data Accountability Act” (CA SB 253)[3] which was later amended by California Senate Bill 219[4] has been introduced in New York[5], Colorado[6], New Jersey[7], and Illinois[8] that would require companies with more than $1 billion in annual revenue and doing business in the particular state to annually report their greenhouse gas (GHG) emissions, similar to what California will require beginning in 2026.
To add to the list of considerations for companies to keep on their radar, U.S. Senator Bill Hagerty recently introduced federal legislation to “prohibit entities integral to the national interests of the United States from participating in any foreign sustainability due diligence regulation, including the Corporate Sustainability Due Diligence Directive of the European Union”.[9] While Senator Hagerty’s bill appears to be symbolic and unlikely to be enacted, it has a private right of action that could prove troublesome if the legislation should be enacted.
[1] See, Press Release 2025-58, Securities and Exchange Commission, “SEC Votes to End Defense of Climate Disclosure Rules” (March 27, 2025), https://www.sec.gov/newsroom/press-releases/2025-58.
[2] Securities and Exchange Commission, Final Rule “The Enhancement and Standardization of Climate-Related Disclosures for Investors,” 17 CFR 210, 229, 230, 232, 239, and 249, adopting release available at https://www.sec.gov/files/rules/final/2024/33-11275.pdf.
[3] Cal. Health & Safety Code § 38532.
[4] Senate Bill 219, Greenhouse gases: climate corporate accountability: climate-related financial risk, Cal. Health & Safety Code §§ 38532, 38533, Bill Text available at https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB219.
[5] New York Senate Bill S3456, “Climate Corporate Accountability Act,” available at https://www.nysenate.gov/legislation/bills/2025/S3456.
[6] Colorado House Bill 25-1119, “A Bill for an Act concerning requiring certain entities to disclose information concerning greenhouse gas emissions,” available at https://leg.colorado.gov/bills/HB25-1119.
[7] New Jersey Senate Bill 4117, “Climate Corporate Data Accountability Act,” available at https://legiscan.com/NJ/text/S4117/2024.
[8] Illinois House Bill, “Climate Corporate Accountability Act,” available at https://www.ilga.gov/legislation/BillStatus.asp?DocNum=3673&GAID=18&DocTypeID=HB&LegId=162463&SessionID=114&GA=104.
[9] Senate Bill 985, 119th Congress (2025-2026), ‘‘Prevent Regulatory Overreach from Turning Essential Companies into Targets Act of 2025’’ or the ‘‘PROTECT USA Act of 2025,’’ Bill Text available at https://www.hagerty.senate.gov/wp-content/uploads/2025/03/HLA25119.pdf
