U.S. SEC Climate-Related Disclosure Rule: The Eighth Circuit Litigation History and Developments in the May 2026 Full Rescission Proposal
Overview
The climate 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 public companies to disclose Scope 1 and 2 emissions and the financial impact of climate-related risks. However, following a wave of lawsuits filed by industry groups and Republican state governors nationwide, the SEC stayed enforcement of the rule in April 2024, and all litigation was consolidated before the Eighth Circuit Court of Appeals for continued review. Following the change in administration in January 2025 and the resulting shift to a Republican-majority SEC commissioner composition, the SEC formally published, in May 2026, a proposed amendment rule to fully rescind the climate disclosure rule. The comment period closed in July 2026, and the final rescission procedures are currently nearing completion.
Enforcement Timeline
March 6, 2024: SEC adopts the final climate-related disclosure rule
April 4, 2024: In response to numerous legal challenges, the SEC voluntarily stays enforcement of the rule
2024–2025: Consolidated nationwide litigation proceeds before the Eighth Circuit Court of Appeals
May 2026: SEC formally publishes a proposed rule (NPRM) to fully rescind the climate disclosure rule
July 2026: The public comment period on the rescission proposal closes
As of 2026: SEC's administrative process toward a final rescission decision is in its final stage
Business Impact
U.S. public companies—including Japanese companies that issue U.S. ADRs—are expected to be able to avoid the direct federal compliance burden of calculating and disclosing Scope 1 and 2 emissions in Form 10-K and obtaining third-party assurance under the SEC rule. However, because disclosure requirements under California's climate disclosure state laws (SB 253/SB 261), the EU's Corporate Sustainability Reporting Directive (CSRD), and private investor expectations based on TCFD/ISSB remain in effect and continue to expand, companies cannot eliminate their global climate data management systems altogether and must recalibrate their disclosure strategy to meet the requirements of each jurisdiction and market.