SEC announces it will stop defending controversial climate disclosure rule

The Security and Exchange Commission announced Thursday it will stop defending its controversial climate-disclosure rule against legal challenges, and it would not proceed with oral arguments. 

“The goal of today’s Commission action and notification to the court is to cease the Commission’s involvement in the defense of the costly and unnecessarily intrusive climate change disclosure rules,” acting SEC Chair Mark Uyeda said in a statement. 

In a 3-2 vote, the commission adopted the rule in March 2024, with some of the more stringent aspects of the proposed rule removed. Despite the concessions, the rule faced a barrage of lawsuits from interest groups, trade associations and 43 states. The challenges were consolidated in the Eighth Circuit, and the SEC announced in April it would not implement the rule while the legal challenges played out.

The Liberty Justice Center was among the litigants challenging the rule. The center’s lawsuit argued the rule violated the First Amendment by forcing companies to speak on this issue and that the rules exceeded the SEC’s authority because they were not authorized by Congress.

“These illegal rules never should have been adopted. They’re about forcing companies to support an ideological agenda, not regulating securities and protecting investors. The SEC is right to drop its defense of these indefensible rules,” Jacob Huebert, president of the Liberty Justice Center, said in a statement.