SEC Halts Climate Disclosure Rule Amid Legal Battles

The U.S. Securities and Exchange Commission has temporarily suspended its new climate disclosure regulation due to ongoing lawsuits, aiming to reduce uncertainty for affected companies.

The SEC has paused the implementation of its climate disclosure rule, which mandates U.S. public companies to report greenhouse gas emissions and climate risks.
Legal challenges arose immediately after the rule's finalization, prompting a stay to avoid regulatory uncertainty while court proceedings continue.
The rule, which was finalized in March, has been criticized for being watered down from its original proposal, leading to lawsuits from both business groups and environmental organizations.
Despite the pause, the SEC intends to vigorously defend the rule's validity, asserting its authority to require investor-relevant disclosures.
The rule's requirements, including the reporting of indirect emissions known as Scope 3, were set to take effect in 2026, aligning with similar regulations in other jurisdictions.