SEC Acting Chair Seeks to Pause Legal Proceedings Against Climate Disclosure Rule

Acting U.S. Securities and Exchange Commission (SEC) Chairman Mark Uyeda announced today that he would request a postponement of legal proceedings against the SEC’s new climate disclosure rule, citing concerns that the rule is “deeply flawed” and could cause “significant harm” to capital markets and the economy.

Uyeda assumed the role of Acting Chair following the resignation of former Chair Gary Gensler in January after the election of Donald Trump. Trump’s nominee for SEC Chair, Paul Atkins, who has yet to be confirmed, has also opposed the climate reporting rule.

The SEC, under Gensler, released and adopted the climate disclosure rule in March 2024, requiring public companies in the U.S. to disclose climate risks affecting their businesses, their strategies for managing those risks, the financial impact of severe weather events, and, in some cases, greenhouse gas emissions from their operations. Uyeda and Commissioner Hester Peirce opposed the rule, arguing that existing disclosure requirements were sufficient and that the SEC had exceeded its mandate by addressing climate change issues.

Legal challenges to the rule followed immediately after its release, with nine court petitions filed within 10 days, including a lawsuit led by 25 Republican state attorneys general and another motion by the U.S. Chamber of Commerce seeking a stay of the rule. The cases were consolidated in the Eighth Circuit court, and in April, the SEC announced it would pause implementation of the rule while reviewing legal challenges, though it initially planned to “continue vigorously defending” the new disclosure requirements.

In August, the SEC launched its legal defense, arguing that the disclosures required by the rule provide “information directly relevant to the value of investments” and fall within the Commission’s authority. However, Uyeda has now stated that the SEC’s defense in court “does not reflect my views,” questioning the Commission’s statutory authority to adopt the rule, its necessity, the cost-benefit analysis, and procedural adherence in its adoption.

Given the change in leadership and composition of the Commission, Uyeda has directed SEC staff to notify the court of these developments and request additional time to deliberate on the appropriate next steps regarding the climate disclosure rule.