SEC Proposes Rescinding Climate Disclosure Rule in Major Trump Policy Shift

The Securities and Exchange Commission has proposed rescinding the climate-related disclosure rule adopted during the Biden administration, a move that would end a major effort to require public companies to report climate-related financial risks to investors.

The rule was approved in 2024 but never took effect after facing legal challenges from business groups and Republican-led states. Under the Trump administration, the SEC stopped defending the regulation in court and has now begun the formal process of removing it. SEC officials argue the rule exceeded the agency’s authority and imposed unnecessary compliance costs on companies.

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The proposal reflects a broader shift in federal climate policy since President Donald Trump’s return to office. The administration has moved away from climate-focused regulatory initiatives and emphasized reducing regulatory burdens on businesses.

Supporters of climate disclosure requirements argue investors need standardized information about climate-related risks, while opponents contend such mandates push companies into political and environmental reporting beyond the SEC’s traditional mission. A public comment period will take place before any final decision is made.

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