U.S. SEC Climate-Related Disclosure Rule — Litigation History and the May 2026 Proposal for Full Rescission
ENFORCEMENT TIMELINE
Phased application beginning with fiscal year 2026 (varies by company size and category)
Overview
The climate-related disclosure final rule adopted by the U.S. Securities and Exchange Commission (SEC) on March 6, 2024—"The Enhancement and Standardization of Climate-Related Disclosures for Investors"—required U.S. public companies to disclose climate-related governance, strategy, financial impacts, and Scope 1 and 2 greenhouse gas emissions (with third-party assurance for large companies). However, following numerous lawsuits filed by industry groups and Republican state attorneys general nationwide, the SEC stayed enforcement of the rule on April 4, 2024. All litigation was subsequently transferred to and consolidated in the Eighth Circuit Court of Appeals for review. Following the change in administration in January 2025, the SEC's commissioner composition changed, and under the new leadership the SEC formally published, in May 2026, a proposed rule to fully rescind the climate disclosure rule. The public comment period under the Administrative Procedure Act (APA) has since closed, and the final rescission process is nearing completion.
Enforcement Timeline
March 21, 2022: SEC publishes the proposed disclosure rule (including Scope 3 disclosure)
March 6, 2024: SEC adopts the final rule (withdrawing mandatory Scope 3 disclosure and limiting mandatory Scope 1 and 2 disclosure to large companies)
April 4, 2024: In response to numerous lawsuits, the SEC voluntarily stays enforcement of the rule
2024–2025: Consolidated litigation proceeds before the Eighth Circuit Court of Appeals
May 2026: SEC publishes a proposed rule to fully rescind the climate disclosure rule
July 2026: Public comment period on the rescission proposal closes; the final rescission process continues
Related Regulations / Topics
Business Impact
U.S. public companies—including Japanese companies that issue U.S. ADRs—are expected to be relieved of direct compliance obligations under the SEC climate disclosure rule, such as calculating Scope 1 and 2 emissions, obtaining third-party assurance, and including such disclosures in Form 10-K. However, because disclosure requirements under California SB 253/SB 261, the EU's Corporate Sustainability Reporting Directive (CSRD), and privately led frameworks such as TCFD/ISSB continue to exist and expand, this does not eliminate the need for corporate sustainability disclosure practices overall. Companies will need to balance reduced federal-level disclosure burdens against continued alignment with state law, foreign law, and market-driven expectations.