SEC Refuses to Answer Whether It Will Enforce Climate Disclosure Law If Upheld by Courts

On July 23, 2025, there was a notable development in the legal proceeding (currently pending in the Eighth Circuit) challenging the validity of the SEC's mandatory climate disclosure law.  By way of background, in April 2025--in response to the Trump Administration's SEC abandoning the defense of the climate disclosure rule--the Eighth Circuit directed the SEC to state “whether the Commission intends to review or reconsider the rules at issue in this case” and if the SEC elects to take no action, “whether the Commission will adhere to the rules if the petitions for review are denied.”  In effect, the Eighth Circuit was signaling that if the SEC no longer supported the climate disclosure regulation, it should engage in the normal administrative process to overturn it.  

Yesterday, the SEC emphatically declined to take up the court's invitation, instead asking the court to issue a ruling, stating that “a decision from this Court would inform the scope and need for such action, including providing insights as to the Commission's jurisdiction and authority.”  The SEC proclaimed that such a decision “would [] promote an efficient resolution to the dispute.”  In other words, the Trump Administration SEC is signaling that it seeks a judicial determination that will, presumably, limit the scope of the SEC's authority, thus rendering it far more difficult for the SEC to engage in such climate-focused rulemaking in the future (under a different administration).  

The lone remaining Democratic SEC Commissioner--Caroline Crenshaw--took extensive issue with the SEC's response.  First, she stated that the SEC failed to answer one of the court's key questions--whether the SEC would “adhere to the [R]ules if the petition for review are denied”--although noting that “[t]he unspoken truth under this Commission is that the answer is ‘no.’”  Further, Crenshaw proclaimed that the “[SEC] is seeking to avoid its legal obligations under the guise of conserving ‘Commission time and resources’ . . . at the expense of judicial resources.”  Crenshaw argues that “[i]f this Commission wants to rescind, repeal or modify the Rules, which were promulgated by-the-book, then it must do the statutorily-required work [and] cannot take the easy way out . . . [by] ask[ing] the Court to do the work for us.” 

It is clear that the Trump Administration SEC is seeking a clear ruling from the courts that will limit the ability of the SEC to engage in future rule-making, particularly concerning climate-related topics.  It is likewise clear that the SEC's response to the Eighth Circuit failed to fully address all of the questions posed by the Court.  What remains to be seen is whether the Eighth Circuit decides to engage with the legal questions involved, despite the non-responsiveness of the SEC, or to apply further pressure to the SEC in order to compel answers to the questions previously posed by the court.