SEC climate disclosure rule

The SEC climate disclosure rule, formally titled The Enhancement and Standardization of Climate-Related Disclosures for Investors, was adopted by the U.S. Securities and Exchange Commission on March 6, 2024. It requires publicly traded companies to disclose material climate-related risks, governance and risk-management processes, climate-related targets and goals, and certain financial-statement impacts from severe weather events and transition activities.

Key features of the adopted rule include:

• Scope 1 and Scope 2 greenhouse gas emissions disclosure for large accelerated filers and accelerated filers, but only when those emissions are material. Notably, the SEC dropped the Scope 3 (value-chain) emissions requirement that had appeared in the 2022 proposal after heavy industry pushback.
• Required disclosure of board and management oversight of climate risks.
• Disclosure of climate-related targets, transition plans, and use of carbon offsets or renewable energy credits when material.
• Phased compliance beginning with fiscal year 2025 for the largest filers, with assurance requirements for emissions data phased in later.

The rule was immediately challenged in multiple federal circuit courts by states (led by attorneys general from Republican-led states), industry groups including the U.S. Chamber of Commerce, and—from the opposite direction—environmental groups arguing it was too weak. The petitions were consolidated in the Eighth Circuit. On April 4, 2024, the SEC voluntarily stayed the rule pending judicial review.

Following the 2024 U.S. election and a change in SEC leadership, the Commission announced in March 2025 that it would no longer defend the rule in court, effectively halting implementation. The rule's future remains uncertain.

The SEC's effort paralleled mandatory climate disclosure regimes elsewhere, including the EU's Corporate Sustainability Reporting Directive (CSRD), the International Sustainability Standards Board (ISSB) standards IFRS S1 and S2, and California's SB 253 and SB 261, which impose broader emissions reporting (including Scope 3) on large companies doing business in the state.