SEC Acting Chair Directs SEC Staff to Pause Litigation Over Climate-Related Disclosure Rule

On February 11, 2025, Mark Uyeda, Acting Chair of the US Securities and Exchange Commission (“SEC”), issued a statement indicating that the SEC will not attempt to defend the Enhancement and Standardization of Climate-Related Disclosures for Investors rule (the “Rule”). The Rule, which we discussed in our prior alert, would have required public companies to make certain climate-related disclosures, including disclosures relating to climate-related risks and greenhouse gas emissions. After the SEC adopted the Rule on March 6, 2024, the Rule faced a series of legal challenges from states and industry groups, which were consolidated before the Eighth Circuit. The Rule is currently stayed pending completion of the Eighth Circuit litigation. Uyeda’s statement, which calls the Rule “deeply flawed” and reiterates that he continues “to question the statutory authority of the Commission to adopt the Rule, the need for the Rule, and the evaluation of costs and benefits,” requests that the Eighth Circuit not schedule the case for argument to provide time for the SEC to “deliberate and determine the appropriate next steps.”

Given the tenor of Uyeda’s statement and the Trump Administration’s agenda to roll back environmental, social, and governance matters, the SEC will likely either repeal the Rule itself or allow the Rule to be overturned by the Eighth Circuit. Companies that would have been subject to the Rule still may be required to comply with other jurisdictions’ more extensive climate-related disclosure laws, including California’s SB 253 and SB 261, and the European Union’s Corporate Sustainability Reporting Directive, which were discussed in our prior alert, along with new climate disclosure bills that recently took effect in Canada and Australia.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. John Rousakis, an O'Melveny partner licensed to practice law in New York; Eric Rothenberg, an O'Melveny of counsel licensed to practice law in New York and Missouri; Michele W. Layne, an O’Melveny of counsel licensed to practice law in California; Pamela A. Miller, an O'Melveny partner licensed to practice law in New York; Steven J. Olson, an O'Melveny partner licensed to practice law in California; Jennifer B. Sokoler, an O'Melveny partner licensed to practice law in New York; Meaghan VerGow, an O'Melveny partner licensed to practice law in the District of Columbia and New York; and Chris Bowman, an O’Melveny associate licensed to practice law in California, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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