SEC Withdraws Litigation Support for Climate Disclosure Rule

On March 27, the SEC voted to abandon its prior defense of climate disclosure rules for public companies adopted in March 2024. The SEC was facing numerous lawsuits by states and other parties objecting to, among other things, the rule’s required disclosure of emissions.  Following its vote, the SEC sent a letter to the court that had consolidated the pending litigation that it was withdrawing its defense of the rules.  Acting SEC Chair Mark Uyeda said in a statement at the time that “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.”  In the registered fund space, the SEC proposed rule regarding enhanced disclosures by certain investment advisers and investment companies about ESG practices is still pending, and unlikely to be revived. Fund directors should continue to oversee compliance with names rule requirements for ESG funds and seek to verify that fund ESG disclosures match how the fund is being managed.

Click here to read the SEC’s Climate Disclosure Rules Press Release.