SEC Commissioner Caroline Crenshaw criticized the decision to abandon the rule, arguing that it unlawfully undermines valid regulations without following proper procedures for amendment or replacement.

The SEC had a self-imposed deadline of March 28, 2025, to inform the U.S. Court of Appeals for the Eighth Circuit of its decision regarding the legal challenge.

In April 2024, the SEC had paused the implementation of the climate disclosure rule to review legal petitions, initially planning to defend the regulations vigorously in court.

This decision was anticipated following remarks by Uyeda, reflecting the SEC's Republican majority stance and a broader trend initiated by the Trump administration to roll back climate change initiatives.

On March 27, 2025, the U.S. Securities and Exchange Commission (SEC) voted to cease its legal defense of climate disclosure rules established in March 2024, which mandated public companies to report on climate risks and greenhouse gas emissions.

Environmental advocate Steven Rothstein echoed this sentiment, stating that the SEC's decision undermines investor access to crucial climate-related information.

Originally adopted in 2024, these regulations were designed to provide investors with essential information regarding climate risks and their financial implications, responding to strong investor demand.

Sustainability-focused investors, managing $50 trillion in assets, expressed disappointment with the SEC's decision, highlighting the ongoing demand for climate risk disclosures from companies.

Following this decision, the SEC has officially withdrawn its defense in court and will no longer pursue legal arguments on behalf of these climate disclosure regulations.

The SEC's decision comes after significant opposition from industrial lobby groups and Republican state attorneys general, who filed lawsuits claiming the regulations exceeded the SEC's authority and imposed undue burdens on businesses.

These legal challenges arose immediately after the rule's adoption, with lawsuits from 25 Republican state attorneys general and the U.S. Chamber of Commerce, leading to a consolidation of petitions in the Eighth Circuit Court of Appeals.

Acting SEC Chairman Mark Uyeda, who opposed the initial rule, described it as 'costly and unnecessarily intrusive,' emphasizing the Commission's goal to disengage from defending these regulations.