As if the excitement from the semiannual reporting proposal was not enough, the White House’s Office of Information and Regulatory Affairs (OIRA) updated its dashboard to reflect the fact that the SEC had submitted a rulemaking titled “Rescission of Climate-Related Disclosure Rules” on Monday. Perhaps due to the fact that we never had to comply with the climate-related disclosure requirements as a result of stay imposed due to the pendency of litigation, it is easy to forget that those requirements remain in the SEC’s rules, and that the SEC must go through a rulemaking process to amend the rules to eliminate the requirements.

To briefly review the bidding, back in March of last year, the SEC announced that it had voted to discontinue its defense of the climate disclosure rules that were adopted in March 2024 and were challenged in litigation pending in the Eighth Circuit. The SEC’s announcement noted that a letter had been sent to the court stating that the agency was withdrawing its defense of the rules and that its counsel was no longer authorized to advance the arguments in the brief that the SEC had filed. Several months later, the SEC provided a status update to the Eighth Circuit in which the agency indicated that it does not intend to review or reconsider the climate disclosure rules. The SEC also requested that the court lift the stay on the litigation and continue considering the parties’ arguments regarding the scope of the agency’s power to adopt the climate disclosure requirements. In the status update, the SEC stated: “[i]f the Court were to uphold the Rules in whole or in part, any reconsideration of them would be subject to Commission deliberation and vote of its members, and the Commission cannot prejudge that action. Moreover, a decision from this Court would inform the scope and need for such action, including providing insights as to the Commission’s jurisdiction and authority.”

In their response to the SEC’s status report, the intervenors argued that the case should be held in abeyance until the SEC decides on a course of action with respect to repealing or proceeding with the rules. Last September, the Eighth Circuit issued an order rejecting the SEC’s request. The order stated, the “petitions for review [of the validity of the climate disclosure rules (the Final Rules)] will be held in abeyance to promote judicial economy until such time as the Securities and Exchange Commission reconsiders the challenged Final Rules by notice-and-comment rulemaking or renews its defense of the Final Rules. The Final Rules have been stayed, and an abeyance will not cause material prejudice to the petitioners. It is the agency’s responsibility to determine whether its Final Rules will be rescinded, repealed, modified, or defended in litigation.”

While the standoff with the Eighth Circuit persisted for some time, it now appears that the Commission contemplates moving forward with the necessary rulemaking to rescind the climate disclosure rules. We can certainly expect this to continue to be a controversial topic as the administrative process now plays out back at the SEC.

– Dave Lynn