US SEC Climate
Disclosure Rule
The SEC's landmark attempt to mandate climate risk and emissions disclosure for public companies -- adopted March 2024, stayed immediately, and functionally abandoned under the Trump administration. The action has shifted to California and international standards.
In March 2024, the US Securities and Exchange Commission adopted a rule that would have required publicly traded companies to disclose climate-related risks and, for the largest companies, report their greenhouse gas emissions. It was the first time the federal government tried to make climate disclosure mandatory for the capital markets. The rule never took effect. The SEC stayed it within weeks of adoption, and after the change in administration in January 2025, the agency withdrew its legal defence entirely.
As of April 2026, the rule is technically still on the books but has no practical force. No company is required to comply, no enforcement is planned, and the 8th Circuit Court of Appeals has paused the legal challenge indefinitely, telling the SEC to decide what it wants to do with its own rule. A formal rescission has not been initiated. For all practical purposes, mandatory federal climate disclosure in the United States is dead for the foreseeable future.
That does not mean the pressure for climate data has gone away. California stepped into the gap with two laws -- SB 253 and SB 261 -- that require large companies doing business in the state to report emissions and climate risks. The first Scope 1 and 2 reports under SB 253 are due in August 2026. Internationally, over 30 jurisdictions are adopting or moving toward the ISSB's global climate disclosure standards. For companies with operations beyond US borders, the question is not whether they will need to report climate data, but under which framework.
The SEC climate rule has moved through six phases since 2022. It is currently stayed with its defence withdrawn -- functionally dead at the federal level. Click each phase for details.
Under the Trump administration, SEC voted to end its defence of the rule in the 8th Circuit. Acting Chair Uyeda signalled the rule would not be enforced. In September 2025, the 8th Circuit placed the case in abeyance, ordering the SEC to decide whether to rescind, modify, or defend the rules.
The SEC rule was always narrower than Europe's CSRD. With the SEC rule functionally dead, the gap has widened further. Companies subject to both jurisdictions should use CSRD as their compliance baseline.
With federal climate disclosure effectively dead, state-level action -- led by California -- is filling the gap. These laws apply based on revenue thresholds and business activity in the state, regardless of where a company is headquartered.
GHG emissions are categorised into three scopes. The SEC rule, California laws, and international standards each cover different scopes with different requirements.
GHG emissions from sources owned or controlled by the company. Includes on-site fuel combustion, company vehicles, fugitive emissions, and process emissions.
With the SEC rule sidelined, the ISSB's IFRS S1/S2 standards are emerging as the de facto global baseline, with over 30 jurisdictions adopting or moving toward mandatory reporting. California's laws track the GHG Protocol more closely than the SEC rule did.
On 6 March 2024, the US Securities and Exchange Commission adopted its final climate disclosure rule, Release 33-11275, after two years of contentious rulemaking. The rule required SEC registrants to disclose material climate-related risks, governance processes for managing those risks, Scope 1 and Scope 2 greenhouse gas emissions (if material), the financial impact of severe weather events on financial statements, and any climate targets or transition plans the company had adopted. It was the most significant expansion of mandatory disclosure requirements since the Sarbanes-Oxley Act.
The final rule was substantially narrower than the March 2022 proposal. Most notably, the SEC dropped the requirement to disclose Scope 3 (value chain) emissions entirely, added a materiality filter for Scope 1 and 2 emissions, extended the phase-in timeline, and included safe harbour provisions for forward-looking statements about climate targets. Even in this reduced form, the rule drew immediate legal challenges from both sides -- industry groups argued it exceeded SEC authority, while environmental advocates argued it was too weak.
Within weeks of adoption, the SEC voluntarily stayed the rule pending resolution of consolidated legal challenges in the 8th Circuit Court of Appeals (Iowa v. SEC). The stay halted all compliance deadlines before any company was required to file. The litigation raised fundamental questions about the SEC's statutory authority to mandate climate disclosure under the Securities Act and Exchange Act, with challengers invoking the "major questions doctrine" established in West Virginia v. EPA (2022).
The 2025 change in administration effectively sealed the rule's fate. The Trump administration's SEC, under Acting Chair Mark Uyeda, withdrew the agency's defence of the rule in the 8th Circuit in March 2025. While a formal rescission through notice-and-comment rulemaking has not yet been initiated as of April 2026, the rule has no practical force. No company is required to comply, and no enforcement is anticipated.
The vacuum at the federal level has been filled by state action and international standards. California's SB 253 (Climate Corporate Data Accountability Act) requires companies with over USD 1 billion in annual revenue doing business in California to report Scope 1, 2, and 3 emissions with third-party verification -- a more demanding requirement than the SEC rule would have imposed. SB 261 requires TCFD-aligned climate risk reports from companies with over USD 500 million in revenue, though the Ninth Circuit enjoined SB 261 enforcement in November 2025 and CARB has deferred the reporting deadline pending the appeal. These laws apply regardless of where a company is incorporated and cover both public and private entities.
Internationally, the ISSB's IFRS S1 and S2 standards, published in June 2023, are being adopted or considered by over 30 jurisdictions including the UK, Canada, Japan, Hong Kong, Australia, and Singapore. For US companies with operations in these markets, ISSB-based requirements may apply regardless of domestic US policy. The EU's CSRD, while scaled back by the 2026 Omnibus Directive, remains the most comprehensive mandatory sustainability reporting framework globally and applies to companies with sufficient EU presence.
The practical implication for US public companies in 2026 is clear: federal mandatory climate disclosure is not happening in the near term, but the pressure for climate data is intensifying from multiple directions -- state law, international regulation, investor expectations, customer and supply chain demands, and voluntary frameworks like CDP. Companies that dismantled their climate reporting infrastructure in response to the SEC rule's demise are likely to find themselves rebuilding it for California, for ISSB-adopting jurisdictions, or for the capital markets that increasingly treat climate data as decision-useful regardless of regulatory mandate.
These requirements apply under the SEC rule as adopted. While the rule is stayed, they represent the disclosure framework that California and international standards are converging toward.
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The US climate disclosure landscape spans federal, state, and international instruments.