SEC will stop defending climate-disclosure rule, let litigation play out

By 
 March 29, 2025

The Securities and Exchange Commission (SEC) announced on Thursday that it will stop defending a Biden-era climate-disclosure rule in court and will not implement the rule until the litigation is concluded. 

The rule, first proposed in 2022 and delayed since then, states that publicly traded companies need to disclose CO2 emissions in their company reports. Companies opposed to the rule said it imposes a heavy administrative burden on them, and critics argue the cost will be passed on to consumers (as these things always are).

“The goal of today’s Commission action and notification to the court is to cease the Commission’s involvement in the defense of the costly and unnecessarily intrusive climate change disclosure rules,” acting SEC Chair Mark Uyeda said in a statement.

The rule had been adopted in March 2024 by a 3-2 vote, after which numerous lawsuits by trade groups and 43 states were filed. The lawsuits were consolidated to the Eighth Circuit with proceedings set to start in April.

High impact

Kathleen Sgamma, president of the Western Energy Alliance, told Just The News about the planned rule back in 2023, “It’s hard to draw that line exactly what the impact on consumers would be, but when you put this in conjunction with all the other regulations that this administration is piling on,” the impact will be high."

Those fighting against the rule were relieved by the announcement.

“These illegal rules never should have been adopted. They’re about forcing companies to support an ideological agenda, not regulating securities and protecting investors. The SEC is right to drop its defense of these indefensible rules,” Jacob Huebert, president of the Liberty Justice Center, which is a party to the consolidated suit, said in a statement.

The end?

Since the SEC no longer plans to participate in the suit and has dropped out of oral arguments, there's a good chance the suit will be successful and the rule will be overturned.

That would be another victory for the Trump administration, which has promised to roll back regulations of all kinds on business, but especially climate and other woke agenda regulations.

And unlike some of the lawfare we've seen resulting from executive orders by President Donald Trump, this one will be much harder to litigate.

If the originator of the rule doesn't fight for it, no other argument is likely to carry much weight.

The Trump administration is hoping that a reduction in regulations will encourage more companies to form and, eventually, go public.

With the rocky start the stock markets have had during his second term, any boost will be appreciated.

" A free people [claim] their rights, as derived from the laws of nature."
Thomas Jefferson