Full Breakdown
SEC Moves to Repeal Climate Risk Disclosure Rule
6/29/2026, 9:11:02 PM
Background & Context
In May 2024 the U.S. Securities and Exchange Commission (SEC) announced a proposal to rescind the Biden-era rule that required publicly traded companies to disclose climate-related risks, mitigation plans, and greenhouse-gas targets when material. The rule, adopted after extensive public comment, applied only to the largest issuers and only when climate impacts were deemed material. It was paused in 2024 pending litigation and is now slated for public comment through Aug. 3. SEC Chair Paul Atkins argues that the rule “will be guided by materiality as the North Star, avoid the practical effect of dictating corporate behavior, and be imposed only when the expected benefits justify the likely costs and burdens.”
Key Figures & Stakeholders
- Paul Atkins – SEC Chair, former SEC commissioner, former Trump-appointed regulator.
- Amanda Fischer – Policy director, Better Markets (advocacy group).
- Steven Rothstein – CEO, Ceres (sustainable-investment nonprofit).
- CalPERS – California Public Employees’ Retirement System, nation’s largest pension fund.
- Wellington Management – Independent investment manager.
- Danielle Fugere – President, As You Sow (shareholder-activist nonprofit).
- Lee Reiners – Lecturing fellow, Duke University’s Financial Economics Center.
Data & Statistics
- The rule required greenhouse-gas reporting only for the largest public firms and only when the information was material.
- A 2022 Ceres analysis of 370 asset owners and managers showed overwhelming support for stricter greenhouse-gas disclosure.
- CDP reported that up to 80 % of S&P 500 companies already disclose climate information voluntarily.
Official Statements & Responses
The SEC maintains that the climate rule imposes unjustified costs on issuers and shareholders, asserting that “information is material if it is likely to affect an investor’s assessment of a company’s value.” The agency has not provided a detailed cost-benefit analysis and declined to comment on the proposal.
Investor groups have publicly urged retention of mandatory disclosure. CalPERS stated that climate change is a “substantial risk that is material to investors” and that inclusion in financial filings would improve data quality. Wellington Management called climate-risk disclosure “critical” for informed investment decisions, noting that current information is “limited by inadequate information and the absence of a standardized framework.”
Criticism & Opposition
Advocates argue the repeal will render climate disclosures “ad hoc and uneven,” hindering investors’ ability to price emerging risks. Fischer warned that the change “will leave investors worse off in allocating their money,” while Rothstein emphasized the need for standardized metrics comparable to balance sheets. Fugere described the SEC’s stance as “absurd,” noting ongoing costs from climate catastrophes. Reiners warned that without a consistent reporting regime, “it’s just not again consistent, comparable or reliable, and it makes it harder for investors to compare across companies.”
Conflicting Reports & Gaps
The SEC contends many climate risks are immaterial for investors, yet major institutional investors and advocacy groups assert the opposite, citing materiality in their investment analyses. The agency has not disclosed the methodology behind its cost assessments, and the quality of voluntary disclosures varies widely, leaving a gap in comparable data.
Verbatim Quotes
- “It’s just going to leave investors worse off in allocating their money, which rewards management of certain companies that would prefer to have investors less informed, but it disadvantages other companies,” — Amanda Fischer, Better Markets
- “We have a system of standard finance reports — balance sheets, income statements,” — Steven Rothstein, Ceres
- “Climate change is a substantial risk that is material to investors. Making such a risk part of financial disclosures will improve data quality and allow investors to address such risk through asset allocation, voting, or engagement,” — California Public Employees’ Retirement System (CalPERS)
- “Because climate change will continue to profoundly impact society, economies and markets, investors need more information to better price these risks and fully assess the value of an issuer’s securities,” — Wellington Management
- “The theme is this idea that climate change is ‘woke,’ and that it doesn’t have any impact on investors or companies,” — Danielle Fugere, As You Sow
- “An issuer of securities will always have asymmetric information. They’ll always know more about the company — the risk involved in investing in that company’s stock or bonds — than investors,” — Lee Reiners, Duke University
What’s Next
The SEC will accept public comments until Aug. 3, after which it may finalize the repeal or modify the proposal. Ongoing litigation could determine the rule’s fate, while companies may continue voluntary disclosures and remain subject to climate-reporting requirements in the European Union, California, and other jurisdictions. Investors are expected to press for alternative standard-setting mechanisms to ensure comparable climate data.
