As the Securities and Exchange Commission (SEC) steps back from defending its March 2024 Climate Disclosure Rule, companies face growing uncertainty in navigating an increasingly fragmented and uncertain landscape of state and international mandates—with no uniform standards in sight. This development signals a broader shift under the Trump administration, which has prioritized deregulation, withdrawn support for federal disclosure mandates, and signaled opposition toward state-level requirements. The resulting regulatory divide leaves companies with a patchwork of emerging rules and limited guidance on how to harmonize compliance across jurisdictions.

The SEC Retreats from Its Climate Disclosure Rule
The SEC’s Climate Disclosure Rule, adopted in March 2024, requires public companies to report Scope 1 and 2 greenhouse gas (GHG) emissions and disclose material climate-related risks. Legal challenges quickly followed. Among the first challengers was Liberty Energy, a fracking services company formerly led by current Energy Secretary Chris Wright, which argued that the Rule exceeded SEC’s statutory authority, compelled speech and imposed significant compliance burdens on U.S. businesses. Liberty Energy v. SEC, No. 24-60109 (5th Cir.).

Reprinted courtesy of Michael S. McDonough, Pillsbury, Jillian Marullo, Pillsbury, Cara M. MacDonald, Pillsbury and Kelsey Parker, Pillsbury