SEC Abandons Climate Disclosure Rule

As expected, the SEC under the Trump Administration has abandoned the climate disclosure rule promulgated by the Biden Administration.  Specifically, as stated in a court filing today, “the Commission has determined that it wishes to withdraw its defense of the Rules.”  Further, the SEC has also informed the court that “Commission counsel is no longer authorized to advance the arguments presented in the Commission's response brief.” 

This decision by the SEC was widely anticipated--and, indeed, had previously been telegraphed by the Republican appointees at the SEC.  It is significant nonetheless, as this reversal by the SEC not only provides further evidence of a withdrawal from the climate policies propounded by the Biden Administration but renders the rule less likely to survive legal challenge--and even less likely to be the subject of enforcement action should the courts uphold the rule.  

Still, this is not the end of the litigation over the SEC rule.  A number of states had intervened in defense of the rule (AZ, CO, CT, DE, DC, HI, IL, MD, MA, MI, MN, NV, NM, NY, OR, RI, VT, WA), and these states can continue to present arguments on behalf of the climate disclosure regulation to the Eighth Circuit.  However, the odds that the climate disclosure regulation survives legal challenge when the SEC itself has abandoned it appear quite low.