WASHINGTON — Federal financial regulators announced Friday their intention to eliminate regulations requiring certain publicly traded companies to disclose greenhouse gas emissions and climate-related financial risks, marking another step in dismantling environmental policies from the previous administration.
The Securities and Exchange Commission’s climate reporting regulation has remained suspended since last year, when the Republican-controlled commission halted its legal defense amid court challenges from business organizations and Republican state attorneys general.
In an official statement, the SEC declared its intention to eliminate the disclosure regulations “in their entirety because they exceed the scope of the agency’s statutory authority.” The agency argued that the regulations, which became final in 2024, “impose substantial costs on public companies and their shareholders that are not justified by the informational benefits they may provide to some investors.”
SEC Chairman Paul Atkins stated that removing the regulation would “avoid the practical effect of dictating corporate behavior” and ensure agency rules would “be imposed only when the expected benefits justify the likely costs and burdens.”
Environmental advocacy organizations criticized the move, arguing it would deprive investors of crucial information needed to evaluate financial risks and other climate-related dangers.
“The SEC’s mission is to protect investors and the public by ensuring they have access to material information,” said Kathy Fallon, director of land systems at the nonprofit Clean Air Task Force. “While imperfect, the rule was an important step toward giving investors consistent information about financially material climate risks, including the use of carbon offsets.”
Fallon called on the commission to maintain the regulation and enforce disclosure requirements “that give both investors and the public the transparency they need.”
The elimination of the climate disclosure regulation represents one of numerous environmental policy reversals during President Donald Trump’s second administration. The Environmental Protection Agency has dismantled significant climate change initiatives, advanced deregulatory measures that Trump describes as the most extensive in American history, and terminated billions of dollars in environmental justice funding from the previous administration.
EPA Administrator Lee Zeldin has concentrated on weakening or removing regulations considered climate-friendly, including withdrawing a scientific determination that has served as the foundation for U.S. greenhouse gas regulation and climate change action.
Zeldin has stated his actions will put a “dagger through the heart of climate change religion.”
The SEC, an independent agency with presidential appointees, approved the climate regulation in March 2024 in a partisan decision. Three Democratic commissioners voted in favor while two Republicans voted against.
The commission now consists of three Republican members, including Atkins, with no Democratic representation.
The 2024 regulation was among the most closely watched recent proposals from the nation’s primary financial regulatory body, generating over 24,000 public comments from corporations, auditors, lawmakers and industry organizations during a two-year development process. The approval moved the United States toward alignment with the European Union and states like California, which have established comparable corporate disclosure requirements.
A 60-day public comment period will begin once the proposal appears in the Federal Register, anticipated within days.
