March 28, 2025
What happened?
On March 27, 2025, the Securities and Exchange Commission voted to stop its defense of the rules requiring public companies to disclose climate-related risks. The Biden era rules were adopted on March 6, 2024, and sought to expand requirements for companies to disclose greenhouse gas emissions and information related to severe weather events and other natural conditions. A variety of legal challenges followed, and this litigation was consolidated in the Eighth Circuit.
Following the Commission’s vote, the SEC counsel withdrew its defense of the rules and sent a letter to the court stating that counsel is no longer authorized to advance the arguments put forth in the brief filed during the Biden administration. Acting SEC Chairman, Mark Uyeda, said, “[t]he 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.”
What does this mean for me?
The review of pending cases is typical from one presidential administration to another, abandoning litigation and executing an about-face is a little more dramatic. However, dropping the defense of climate disclosure rules is in keeping with the Trump administration’s priorities. Similarly, the announcement of the Crypto Task Force occurred in tandem with the SEC’s voluntary dismissal of enforcement actions against the crypto exchange Coinbase. Many other matters currently under investigation or in active litigation will likely be reviewed to see how they align with the goals of the new administration.
While the administration has priorities in mind for the SEC, and rapid change will draw attention, do not lose focus on the fundamental requirements of an effective compliance program. Maintain course, stay adequately resourced, and keep an eye on the changes that impact your business lines.
