Victory for Critics as SEC Drops Defense of 'Intrusive' Climate Disclosure Mandate

Ryan DeLarme 3/28/25

In a surprising turn of events, the Securities and Exchange Commission (SEC) has abandoned its defense of a contentious climate-disclosure rule, effectively halting its participation in upcoming oral arguments. The announcement, made on Thursday, marks a significant shift in the agency's stance on the regulation, which has faced fierce opposition since its inception.

Acting SEC Chair Mark Uyeda hailed the decision as a victory for common sense, stating, "By stepping back from this ill-conceived battle, the Commission is putting an end to its misguided support of burdensome and overreaching climate change disclosure mandates."

The rule, narrowly passed in a 3-2 vote in March 2024, had already been watered down from its original proposal. However, even with the modifications, it encountered a firestorm of legal challenges from a diverse array of opponents, including interest groups, trade associations, and a staggering 43 states. The lawsuits were eventually consolidated in the Eighth Circuit, prompting the SEC to suspend the rule's implementation in April pending the outcome of the legal proceedings.

Among the vocal critics of the regulation was the Liberty Justice Center, which argued in its lawsuit that the rule infringed upon companies' First Amendment rights by compelling them to address climate issues and overstepped the SEC's authority, lacking explicit Congressional approval.

Jacob Huebert, president of the Liberty Justice Center, celebrated the SEC's retreat, declaring, "These unlawful rules should never have seen the light of day. They were a blatant attempt to coerce companies into endorsing a political ideology rather than focusing on the SEC's core mission of regulating securities and safeguarding investors. The agency has made the right call in abandoning this untenable position."