SEC ends legal defense of its climate rules

The climate disclosure rules adopted a year ago by the SEC will no longer be defended in court by the commission after a vote Thursday.

A news release said that the SEC “withdraws its defense of the rules and that commission counsel are no longer authorized to advance the arguments in the brief the commission had filed.”

The move was largely expected after the SEC’s acting chair, Mark Uyeda — who replaced Gary Gensler earlier this year — said six weeks ago that the commission had requested additional time from the courts to weigh its options. The SEC had approved the rules in March 2024 by a 3–2 vote.

The Enhancement and Standardization of Climate-Related Disclosures for Investors, intended to be implemented for the fiscal year beginning in 2025, faced legal challenges on multiple fronts — challenges that the SEC had previously agreed to argue against once the Eighth Circuit scheduled arguments in the consolidated case.

According to the release, the SEC sent a letter to the court after Thursday’s vote stating its withdrawal.

“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,” Uyeda said in the release.

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.