Rescission of Climate-Related Disclosure Rules (91 FR 33296)

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SECURITIES AND EXCHANGE

COMMISSION

17 CFR Parts 210, 229, 230, 232, 239,

and 249

[Release Nos. 33–11421; 34–105572; File

No. S7–2026–19]

RIN 3235–AN76

Rescission of Climate-Related

Disclosure Rules

AGENCY

: Securities and Exchange

Commission.

ACTION

: Proposed withdrawal of final

rules.

SUMMARY

: The Securities and Exchange

Commission (‘‘Commission’’) proposes

to rescind amendments to its rules

under the Securities Act of 1933

(‘‘Securities Act’’) and Securities

Exchange Act of 1934 (‘‘Exchange Act’’)

that require registrants to provide

certain climate-related information in

their registration statements and annual

reports.

DATES

: Comments should be received on

or before August 3, 2026.

ADDRESSES

: Comments may be

submitted by any of the following

methods:

Electronic Comments

•Use the Commission’s internet

comment form (https://www.sec.gov/

comments/s7-2026-19/rescission-

climate-related-disclosure-rules).

•Send an email to rule-comments@

sec.gov. Please include File Number S7–

2026–19 on the subject line.

Paper Comments

•Send paper comments to Vanessa

A. Countryman, Secretary, Securities

and Exchange Commission, 100 F Street

NE, Washington, DC 20549–1090.

All submissions should refer to File

Number S7–2026–19. This file number

should be included on the subject line

if email is used. To help the

Commission process and review your

comments more efficiently, please use

only one method of submission. The

Commission will post all comments on

the Commission’s website (https://

www.sec.gov/rules-regulations/public-

comments/s7-2026-19). Do not include

personally identifiable information in

submissions; you should submit only

information that you wish to make

available publicly. The Commission

may redact in part or withhold entirely

from publication submitted material

that is obscene or subject to copyright

protection.

Studies, memoranda, or other

substantive items may be added by the

Commission or staff to the comment file

during this rulemaking. A notification of

the inclusion in the comment file of any

such materials will be made available

on the Commission’s website. To ensure

direct electronic receipt of such

notifications, sign up through the ‘‘Stay

Connected’’ option at www.sec.gov to

receive notifications by email.

A summary of the proposal of not

more than 100 words is posted on the

Commission’s website (https://

www.sec.gov/rules-regulations/2026/05/

s7-2026-19).

FOR FURTHER INFORMATION CONTACT

:

David Russo, Senior Counsel, in the

Office of the General Counsel, at 202–

551–5100, U.S. Securities and Exchange

Commission, 100 F Street NE,

Washington, DC 20549.

SUPPLEMENTARY INFORMATION

: The

Commission is proposing to withdraw

certain previously adopted but not yet

effective amendments to the following

rules and forms:

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1

15 U.S.C. 77a et seq.

2

15 U.S.C. 78a et seq.

3

See The Enhancement and Standardization of

Climate-Related Disclosures for Investors, Release

No. 33–11275 (Mar. 6, 2024) [89 FR 21668 (Mar. 28,

2024)] (‘‘Adopting Release’’). Terms not defined in

this release are used as defined in the Adopting

Release. Because the Final Rules were never

codified in the Code of Federal Regulations (‘‘CFR’’)

as a consequence of being stayed, see infra note 39,

the proposed rescission of the Final Rules would

not require any amendments to the CFR. References

herein to the CFR citations of the Final Rules reflect

what those citations would have been upon

effectiveness, as set forth in the Adopting Release.

4

See, e.g., 15 U.S.C. 77g; 15 U.S.C. 78l.

I. Overview

II. Adoption of The Final Rules And

Subsequent Litigation

III. Discussion of Proposed Rescission

A. Overview of Basis for Rescission: Lack

of Authority and Reevaluation of Policy

Grounds

B. The Final Rules Exceed the

Commission’s Statutory Authority

1. Scope of the Commission’s Disclosure

Authority

2. The Final Rules Exceed the Limitations

on Mandatory Disclosures

3. The Final Rules Should Be Rescinded in

Their Entirety

C. Policy Reasons for Rescinding the Final

Rules

1. The Final Rules Are Unnecessary and

Inconsistent With a Registrant-Specific,

Materiality-Based Approach to

Disclosure That Best Serves the Interests

of Registrants and Investors

2. The Final Rules Stray Well Beyond the

Policy Concerns of the Federal Securities

Laws

3. The Final Rules Impose Significant Costs

on Public Companies and Their

Shareholders That Are Not Justified by

the Informational Benefits They Provide

to Some Investors

4. The High Costs of the Final Rules Are

at Odds With the Commission’s Policy

Objectives of Facilitating Capital

Formation and Promoting Public

Company Status

IV. Economic Analysis

A. Introduction

B. Economic Baseline

1. Affected Parties

2. Current Regulatory Framework

3. Current Market Practices

C. Benefits and Costs

1. Benefits

2. Costs

3. Aggregate Monetized Benefits and Costs

D. Anticipated Effects on Efficiency,

Competition, and Capital Formation

E. Reasonable Alternatives

F. Request for Comment

V. Paperwork Reduction Act

VI. Initial Regulatory Flexibility Act Analysis

A. Reasons for, and Objectives of, the

Proposed Action

B. Legal Basis

C. Small Entities Subject to the Proposed

Amendments

D. Projected Reporting, Recordkeeping, and

Other Compliance Requirements

E. Duplicative, Overlapping, or Conflicting

Federal Rules

F. Significant Alternatives

G. Request for Comment

VII. Congressional Review Act

VIII. Other Matters

Statutory Authority

I. Overview

We propose to rescind the climate-

related disclosure rules adopted by the

Commission in 2024 (‘‘Final Rules’’).

3

Congress gave the Commission certain

specific powers within the Federal

securities laws. Among those powers,

the Commission’s governing statutes

authorize the agency to except from or

add to the mandatory items of

disclosure specified in the Securities

Act and the Exchange Act.

4

This

authority, however, is limited by the

text and context of these statutes.

Furthermore, even when acting

pursuant to an explicit grant of

authority, it is incumbent on the

Commission to implement a disclosure

regime that elicits material information

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5

For purposes of this release, we use the terms

‘‘registrants,’’ ‘‘public companies,’’ ‘‘companies,’’

and ‘‘issuers’’ interchangeably.

6

As discussed below, the Final Rules require

disclosure about, among other things, greenhouse

gas (‘‘GHG’’) emissions, the management of climate-

related risks, and the financial statement effects of

severe weather events. See infra section II. We refer

to these and related disclosure topics throughout

this release as ‘‘climate-related matters.’’

7

See Basic Inc. v. Levinson, 485 U.S. 224 (1988).

8

See The Enhancement and Standardization of

Climate-Related Disclosures for Investors, Release

No. 33–11042 (Mar. 21, 2022) [87 FR 21334 (Apr.

11, 2022)] (‘‘Proposing Release’’); see also The

Enhancement and Standardization of Climate-

Related Disclosures for Investors, Release No. 33–

11061 (May 9, 2022) [87 FR 29059 (May 12, 2022)]

(extension of comment period for Proposing

Release); Resubmission of Comments and

Reopening of Comment Periods for Several

Rulemaking Releases Due to a Technological Error

in Receiving Certain Comments, Release No. 33–

11117 (Oct. 7, 2022) [87 FR 63016 (Oct. 18, 2022)]

(reopening of comment period for Proposing

Release).

9

See, e.g., Richard Vanderford, SEC’s Gensler

Bracing for Lawsuits over Climate Rule, Wall Street

Journal (Feb. 13, 2024), available at https://

www.wsj.com/articles/secs-gensler-bracing-for-

lawsuits-over-climate-rule-60165fec.

10

Adopting Release at 21677–79.

11

Id. at 21677.

12

Id.

13

Id. at 21678.

14

Id. at 21683, n.172.

15

Id. at 21678.

16

Id.

17

17 CFR 229.1500 through 17 CFR 229.1507.

18

17 CFR 210.14–01 through 17 CFR 210.14–02.

19

Under the GHG Protocol, Scope 1 emissions are

direct GHG emissions that occur from sources

owned or controlled by the company. Scope 2

emissions are those emissions primarily resulting

from the generation of electricity purchased and

consumed by the company. See Proposing Release,

section I.D.2.

for investors while being mindful of the

costs imposed on registrants to collect

and disclose that information. When the

Commission loses sight of these

considerations, it risks not only

imposing undue costs on registrants

5

and impeding capital formation, but

also harming the very investors it seeks

to protect.

The Final Rules were a dramatic

overreach of the Commission’s statutory

authority and, independently, unsound

as a matter of policy. Based on an

incorrect view of the scope of its

authority, the Commission determined

that it was appropriate to prescribe

dozens of pages of highly specific

disclosure rules solely about climate-

related matters

6

and apply the bulk of

those rules to virtually all public

companies, regardless of size, industry,

or specific circumstances.

The Final Rules also discounted the

role of market forces in the flow of

information between registrants and

investors. Disclosures mandated by the

Commission are only some of the

information registrants provide to the

marketplace. Investors and analysts

often demand additional information

about a wide range of topics depending

on their particular investment strategies

or non-investment interests. Registrants

in turn may voluntarily provide such

information depending on the nature of

their business and the investor base they

wish to attract. We expect this market-

driven flow of information will continue

following a rescission of the Final Rules,

but it is not the Commission’s role to

require disclosure of particular

information because it is useful for any

one investment strategy or desired by

some political interests for the purpose

of influencing business practices.

Rather, in exercising its authority to

mandate disclosure within the statutory

limits imposed by Congress, the

Commission should seek to adopt rules

that elicit information pursuant to the

standard of materiality established by

the Supreme Court: information that a

reasonable investor would consider

important in buying or selling

securities.

7

Accordingly, as discussed in more

detail in the sections that follow, we

propose to rescind the Final Rules in

their entirety because they exceed the

statutory limits on the Commission’s

disclosure authority. Furthermore, even

if the Commission had authority to

adopt the Final Rules, several

independent policy reasons support

their rescission, including that:

•The Final Rules are unnecessary

and inconsistent with a registrant-

specific, materiality-based approach to

disclosure;

•The Final Rules stray well beyond

the policy concerns of the Federal

securities laws;

•The Final Rules impose substantial

costs that are not justified by the

informational benefits they may provide

to some investors; and

•The Final Rules are at odds with the

Commission’s policy objectives of

facilitating capital formation and

promoting public company status.

II. Adoption of the Final Rules and

Subsequent Litigation

On March 21, 2022, the Commission

proposed rules that would require

registrants to include extensive new

climate-related disclosures in their

registration statements and periodic

reports, including detailed information

about the impact and management of

climate-related risks, GHG emissions,

scenario analysis, internal carbon

prices, and certain climate-related

financial statement effects.

8

The

Proposing Release was highly

contentious,

9

and in response, the

Commission received a large number of

comments from a variety of market

participants, environmental lobbying

groups, and members of the public

expressing starkly divergent views about

the proposed rules.

10

Some commenters supported the

proposed rules, stating that climate-

related risks can have material impacts

on a company’s financial position or

performance.

11

Commenters in support

of the proposed rules indicated, among

other things, that adoption of

mandatory, climate-related disclosure

rules would improve the timeliness,

quality, and reliability of climate-related

information, which would facilitate

investors’ cross-company comparisons

of climate-related risks and lead to more

accurate securities valuations.

12

Many other commenters opposed the

proposed rules and requested either that

the Commission not adopt the proposal

or make significant revisions in the

Final Rules.

13

Some commenters

asserted that the Commission lacked

statutory authority to adopt the

proposed rules.

14

Others stated that

existing voluntary reporting practices

were sufficient to serve the needs of

investors and markets such that the

proposed rules were unnecessary.

15

Opposing commenters further stated

that the proposed rules were overly

prescriptive, that they were not bound

in every instance by a materiality

qualifier, that their adoption would

result in the disclosure of a large

volume of immaterial information that

would be confusing to investors, and

that mandating such disclosure

requirements would impose a

significant burden on registrants while

resulting in few additional benefits for

investors.

16

On March 6, 2024, the Commission

approved the Final Rules by a 3–2 vote.

While the Final Rules included changes

from the proposal in response to

commenter concerns, the adopted

regulations continued to include

numerous, highly prescriptive

disclosure requirements. To house the

extensive new disclosure requirements,

the Final Rules created a new subpart

1500 of Regulation S–K

17

and a new

Article 14 of Regulation S–X.

18

Among

other things, the Final Rules require a

registrant to consider and possibly

disclose the following detailed items:

•If a registrant is a large accelerated

filer (‘‘LAF’’), or an accelerated filer

(‘‘AF’’) that is not otherwise exempted,

and its Scope 1 emissions and/or its

Scope 2 emissions metrics

19

are

material, certain disclosure about those

emissions, including:

•The volume of the emissions

disclosed separately and each expressed

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17 CFR 229.1500. ‘‘Carbon dioxide equivalent’’

or ‘‘CO

2

e’’ means the common unit of measurement

to indicate the global warming potential (‘‘GWP’’)

of each greenhouse gas, expressed in terms of the

GWP of one unit of carbon dioxide. See id.

21

17 CFR 229.1505.

22

17 CFR 229.1502(g).

23

17 CFR 229.1502(a).

24

17 CFR 229.1501(a).

25

17 CFR 229.1503.

26

17 CFR 229.1504.

27

17 CFR 210.14–02(c) and 210.14–02(d).

28

17 CFR 210.14–02(e).

29

17 CFR 210.14–02(h).

30

17 CFR 229.1506. Pursuant to the Final Rules,

an AF must file an attestation report at the limited

assurance level beginning the third fiscal year after

the compliance date for disclosure of GHG

emissions while an LAF must file an attestation

report at the limited assurance level beginning the

third fiscal year after the compliance date for

disclosure of GHG emissions, and then file an

attestation report at the reasonable assurance level

beginning the seventh fiscal year after the

compliance date for disclosure of GHG emissions.

Id.

31

Id.

32

For example, the Commission exempted

smaller reporting companies (each an ‘‘SRC’’) and

emerging growth companies (each an ‘‘EGC’’) from

the requirement to disclose GHG emissions data,

and the Commission completely exempted from the

Final Rules private companies that are parties to

business combination transactions involving a

securities offering registered on Form S–4 or F–4.

See Adopting Release at 21733, 21744.

33

See Adopting Release at 21828–29.

34

Id.

35

See Iowa v. SEC, No. 24–1522 (8th Cir.), and

consolidated cases.

36

Consolidation Order, In re Securities and

Exchange Commission, The Enhancement and

Standardization of Climate-Related Disclosures for

Investors, MCP No. 180 (J.P.M.L. Mar. 21, 2024).

37

15 U.S.C. 78y(c)(2).

38

5 U.S.C. 705.

39

The Enhancement and Standardization of

Climate-Related Disclosures for Investors; Delay of

Effective Date, Release No. 33–11280 (Apr. 4, 2024)

[89 FR 25804 (Apr. 12, 2024)]; see also Sec. & Exch.

Comm’n, In the Matter of the Enhancement and

Standardization of Climate-Related Disclosures for

Investors (Order Issuing Stay), Release No. 33–

11280 (Apr. 4, 2024) (order staying Final Rules).

in the aggregate, in terms of CO

2

e

20

and,

if any constituent gas of the disclosed

emissions is individually material, such

constituent gas disaggregated from other

gases;

•Scope 1 emissions and/or Scope 2

emissions in gross terms by excluding

the impact of any purchased or

generated offsets;

•The methodology, significant

inputs, and significant assumptions

used to calculate the GHG emissions;

•The organizational boundaries used

when calculating the registrant’s

disclosed GHG emissions, including the

method used to determine those

boundaries;

•The operational boundaries used,

including the approach to categorization

of emissions and emissions sources; and

•The protocol or standard used to

report the GHG emissions, including the

calculation approach, the type and

source of any emission factors used, and

any calculation tools used to calculate

the GHG emissions;

21

•If a registrant’s use of internal

carbon pricing is material, the price per

metric ton of CO

2

e and the total price,

including how the total price is

estimated to change over certain time

periods;

22

•Any climate-related risks that have

materially impacted or are reasonably

likely to have a material impact on the

registrant, including on its strategy,

results of operations, or financial

condition;

23

•Any oversight by the board of

directors of climate-related risks,

regardless of the materiality of those

risks, and any role by management in

assessing and managing the registrant’s

material climate-related risks;

24

•Any processes the registrant has for

identifying, assessing, and managing

material climate-related risks and, if the

registrant is managing those risks,

whether and how any such processes

are integrated into the registrant’s

overall risk management system or

processes;

25

and

•If a registrant has set a climate-

related target or goal that has materially

affected or is reasonably likely to

materially affect the registrant’s

business, results of operations, or

financial condition, certain disclosures

about such target or goal, including

material expenditures and material

impacts on financial estimates and

assumptions as a direct result of the

target or goal or actions taken to make

progress toward meeting such target or

goal.

26

•With respect to financial statement

disclosures:

•The capitalized costs, expenditures

expensed, charges, and losses incurred

as a result of severe weather events and

other natural conditions, such as

hurricanes, tornadoes, flooding,

drought, wildfires, extreme

temperatures, and sea level rise, subject

to applicable one percent and de

minimis disclosure thresholds;

27

•The capitalized costs, expenditures

expensed, and losses related to carbon

offsets and renewable energy credits or

certificates (‘‘RECs’’) if used as a

material component of a registrant’s

plans to achieve its disclosed climate-

related targets or goals;

28

and

•If the estimates and assumptions a

registrant uses to produce the financial

statements were materially impacted by

risks and uncertainties associated with

severe weather events and other natural

conditions, such as hurricanes,

tornadoes, flooding, drought, wildfires,

extreme temperatures, and sea level rise,

or any disclosed climate-related targets

or transition plans, a qualitative

description of how the development of

such estimates and assumptions was

impacted.

29

In addition, registrants that are

required to disclose Scopes 1 and/or 2

emissions must file an attestation report

of those emissions subject to phased-in

compliance dates.

30

Further, the Final

Rules require a registrant that is not

required to disclose its GHG emissions

or to include a GHG emissions

attestation report pursuant to the Final

Rules to disclose certain information if

the registrant voluntarily discloses its

GHG emissions in a Commission filing

and voluntarily subjects those

disclosures to third-party assurance.

31

The Final Rules exempt certain

registrants from disclosure in limited

circumstances.

32

Outside these limited

circumstances, the Final Rules require

almost every registrant to comply with

the vast majority of the new disclosure

requirements after a transition period.

33

As the Adopting Release noted, nearly

every registrant will be required to start

complying with the Final Rules by the

fiscal year beginning in 2027.

34

Within 60 days of the Commission’s

adoption of the Final Rules on March 6,

2024, various parties petitioned for

judicial review in multiple Federal

courts of appeals.

35

On March 19, 2024,

the Commission filed a Notice of

Multicircuit Petitions for Review with

the Judicial Panel on Multidistrict

Litigation (‘‘JPML’’), and on March 21,

2024, the JPML issued an order

consolidating the petitions for review in

the U.S. Court of Appeals for the Eighth

Circuit (‘‘Eighth Circuit’’).

36

On April 4,

2024, the Commission, citing its

authority pursuant to the Exchange

Act

37

and the Administrative Procedure

Act,

38

entered a stay of the Final Rules

and ordered that ‘‘the Final Rules

[would be] stayed pending the

completion of judicial review of the

consolidated Eighth Circuit

petitions.’’

39

On March 27, 2025, the Commission

voted to end its defense of the rules. The

Commission staff sent a letter to the

court stating that the Commission

withdraws its defense of the rules and

that Commission counsel are no longer

authorized to advance the arguments in

the brief the Commission had filed.

Thereafter, on September 12, 2025, the

Eighth Circuit issued an Order holding

the consolidated petitions for review in

abeyance ‘‘until such time as the . . .

Commission reconsiders the challenged

Final Rules by notice-and-comment

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Order, Iowa v. SEC, No. 24–1522 (8th Cir. Sept.

12, 2025). The Eighth Circuit’s decision to hold the

consolidated petitions for review in abeyance was

made after (1) the Commission’s filing with the

Eighth Circuit dated Mar. 27, 2025, notifying the

court and the parties in the litigation that the

Commission had ‘‘determined that it wishe[d] to

withdraw its defense of the [Final] Rules’’ and (2)

a status report that the Commission filed with the

Eighth Circuit on July 23, 2025, wherein the

Commission notified the Eighth Circuit that it did

not intend to review or reconsider the Final Rules

at that time and requested that the court proceed

to decide the petitions for review.

41

Id.

42

See, e.g., Bd. of Governors of Fed. Rsrv. Sys. v.

Dimension Fin. Corp., 474 U.S. 361, 373 n.6 (1986)

(holding that an administrative agency, in this case

the Federal Reserve Board, only has the power ‘‘to

police within the boundaries of the [relevant

authorizing statute]’’ and not ‘‘to expand its

jurisdiction beyond the boundaries established by

Congress’’).

43

See West Virginia v. EPA, 597 U.S. 697, 723

(2022) (‘‘Agencies have only those powers given to

them by Congress’’); Util. Air Regul. Grp. v. EPA,

573 U.S. 302, 327–328 (2014) (stating that to avoid

‘‘a severe blow to the Constitution’s separation of

powers,’’ an agency must act within the bounds

established by Congress and may not rewrite

statutory terms ‘‘to suit its own sense of how [a]

statute should operate’’); City of Arlington v. FCC,

569 U.S. 290, 297 (2013) (‘‘No matter how it is

framed, the question a court faces when confronted

with an agency’s interpretation of a statute it

administers is always, simply, whether the agency

has stayed within the bounds of its statutory

authority.’’) (italics in original); K Mart Corp. v.

Cartier, Inc., 486 U.S. 281, 291 (1988) (‘‘In

determining whether a challenged regulation is

valid, a reviewing court must first determine if the

regulation is consistent with the language of the

statute.’’); Stark v. Wickard, 321 U.S. 288, 309

(1944) (‘‘When Congress passes an Act empowering

administrative agencies to carry on governmental

activities, the power of those agencies is

circumscribed by the authority granted.’’); Cal.

Indep. Sys. Operator Corp. v. FERC, 372 F.3d 395,

398 (D.C. Cir. 2004) (stating that a Federal agency

is a creature of statute, has no constitutional or

common law existence or authority, and has ‘‘only

those authorities conferred upon it by Congress’’)

(italics in original) (citation omitted).

44

Dep’t of Homeland Sec. v. Regents of Univ. of

Calif., 591 U.S. 1, 22 (2020); see also id. at 46, 54

(Thomas, J., concurring in the judgment in part and

dissenting in part) (reasoning for three justices that

an agency should rescind an unlawful action rather

than ‘‘continue acting unlawfully [by] carr[ying] the

program forward’’). The majority held that the

Department of Homeland Security’s rescission of a

program was arbitrary and capricious in violation

of the Administrative Procedure Act because the

government did not adequately consider possible

alternatives or reliance interests. Id. at 24–33. This

release considers those issues.

45

See FDA v. Brown & Williamson Tobacco

Corp., 529 U.S. 120, 132–33 (2000); West Virginia

v. EPA, 597 U.S. at 721; Nat’l Fed’n of Indep. Bus.

v. Dep’t of Lab., Occupational Safety & Health

Admin., 595 U.S. 109 (2022); Ala. Ass’n of Realtors

v. Dep’t of Health & Hum. Servs., 594 U.S. 758

(2021) (on application to vacate stay); AMG Cap.

Mgmt., LLC v. FTC, 593 U.S. 67 (2021); Util. Air

Regul. Grp. v. EPA, 573 U.S. at 318–21; Texas v.

United States, 809 F.3d 134 (5th Cir. 2015).

46

See Learning Res., Inc. v. Trump, 146 S.Ct. 628,

638–639 (2026); Biden v. Nebraska, 600 U.S. 477,

502–07 (2023); West Virginia v. EPA, 597 U.S. at

721–24 (need for clear congressional authorization

for assertions of extravagant statutory power over

the national economy); see also FCC v. Consumers’

Rsch., 606 U.S. 656, 705–06 (2025) (Kavanaugh, J.,

concurring) (‘‘[W]hen interpreting a statute and

determining the limits of the statutory text, courts

presume that Congress . . . has not delegated

authority to the President to issue major rules—that

is, rules of great political and economic

significance—unless Congress clearly says as much.

Courts presume that Congress intends to make

major policy decisions itself, not leave those

decisions to agencies .... Congress does not

usually ‘hide elephants in mouseholes’ when

granting authority to the President.’’ (citations

omitted)).

47

See 15 U.S.C. 77aa; 15 U.S.C. 78l(b)(1). In this

release, we refer to the disclosure items that

Congress enumerated in the foregoing provisions

collectively as ‘‘business or financial

characteristics.’’

48

See, e.g., 15 U.S.C. 77g(a)(1); 15 U.S.C.

78l(b)(1).

49

15 U.S.C. 77b(b); 15 U.S.C. 78c(f); see also 15

U.S.C. 78w(a)(2) (requiring the Commission to

consider the effects on competition of any rules that

the Commission adopts under the Exchange Act

and prohibiting the Commission from adopting any

rule that would impose a burden on competition

not necessary or appropriate in furtherance of the

purposes of the Exchange Act).

50

See Bus. Roundtable v. SEC, 905 F.2d 406, 412

(D.C. Cir. 1990) (‘‘As the Supreme Court has said,

rulemaking or renews its defense of the

Final Rules.’’

40

The Eighth Circuit

explained that it is the Commission’s

‘‘responsibility to determine whether its

Final Rules will be rescinded, repealed,

modified, or defended in litigation.’’

41

As a result of the current procedural

posture, the Final Rules remain stayed.

The court has not made any decision on

the merits of any arguments presented

by any petition for review of the Final

Rules.

III. Discussion of Proposed Rescission

A. Overview of Basis for Rescission:

Lack of Authority and Reevaluation of

Policy Grounds

As noted above, we are proposing to

rescind the Final Rules in their entirety

because they exceed the scope of the

Commission’s statutory authority. In

addition, even if a court were to find

that the Commission had authority to

adopt the Final Rules, we have

independent, compelling policy reasons

to rescind the rules in their entirety. The

Final Rules are unnecessary and

inconsistent with a registrant-specific,

materiality-based approach to disclosure

that best serves the interests of

registrants and investors; stray well

beyond the policy concerns of the

Federal securities laws; impose

substantial costs on public companies

and their shareholders that are not

justified by the informational benefits

they may provide to some investors; and

are at odds with the Commission’s

policy objectives of facilitating capital

formation and promoting public

company status.

B. The Final Rules Exceed the

Commission’s Statutory Authority

A fundamental principle of

constitutional and administrative law is

that an administrative agency must act

within its statutory authority.

42

An

agency acts unlawfully when it

exercises power beyond its authority.

43

Agencies must respond to their own

unlawful acts; as the Supreme Court

recently put it, illegal agency action

‘‘presumably requires remedial action of

some sort.’’

44

The proper remedy for the

Commission’s lack of statutory authority

to adopt the Final Rules is rescission.

An agency’s rulemaking power is

determined by examining the text and

context of the relevant statutory

provisions. Statutory provisions are not

read in isolation; courts look to their

place in the overall statutory scheme.

45

Courts also apply the major questions

doctrine to determine the lawfulness of

agency action.

46

In the Federal securities laws,

Congress required specific disclosures

for registrants conducting public

offerings in the United States or

registering securities for trading on U.S.

exchanges. When enacting the

Securities Act and the Exchange Act,

Congress explicitly called for

disclosures of items central to an

understanding of a registrant’s business,

operation and performance, financial

condition, directors, management and

control, capital structure, the rights of

security holders, and the terms of a

registered offering.

47

These disclosures

provide investors with operational and

financial information particular to the

circumstances of the registrant.

Congress also granted the Commission

authority to adopt rules eliminating,

substituting, or adding certain

disclosures. When adopting such a rule,

the Commission must follow the

directives and guardrails in the text and

context of the governing statutes, as

discussed below.

When the Commission exercises its

legal authority to adopt a disclosure rule

under the statutes discussed below, in

certain instances it must also determine

whether the action is necessary or

appropriate in the public interest.

48

When making such a public interest

determination, the Commission must

‘‘consider, in addition to the protection

of investors, whether the action will

promote efficiency, competition, and

capital formation.’’

49

These

considerations are constraints on the

exercise of authority, not sources of

authority.

Courts have also recognized that

federalism limits the Commission’s

rulemaking authority in areas of

corporate governance regulated by State

law.

50

Congress has traditionally left

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‘[c]orporations are creatures of state law, and

investors commit their funds to corporate directors

on the understanding that, except where federal law

expressly requires certain responsibilities of

directors with respect to stockholders, state law will

govern the internal affairs of the corporation.’’’

(citing Santa Fe Indus. v. Green, 430 U.S. 462, 479

(1977)) (emphasis in original)); see also id. at 408

(‘‘[W]e find that the Exchange Act cannot be

understood to include regulation of an issue that is

so far beyond matters of disclosure . . . and that is

concededly a part of corporate governance

traditionally left to the states.’’).

51

See infra note 126.

52

15 U.S.C. 77g(a)(1) (‘‘section 7(a)(1)’’).

53

15 U.S.C. 77s(a) (‘‘section 19(a)’’).

54

15 U.S.C. 78l (‘‘section 12’’).

55

15 U.S.C. 78m (‘‘section 13’’).

56

15 U.S.C. 78w(a)(1) (‘‘section 23(a)(1)’’).

57

The Adopting Release also cites sections 10 and

28 of the Securities Act [15 U.S.C. 77j and 15 U.S.C.

77z–3], and sections 3(b), 15, and 36 of the

Exchange Act [15 U.S.C. 78c, 15 U.S.C. 78o, and 15

U.S.C. 78mm] as sources of statutory authority. See,

e.g., Adopting Release at 21912. For the same

reasons as discussed herein with respect to the

main statutory provisions, the Commission does not

view any of these additional provisions as

providing authority for the Final Rules.

58

15 U.S.C. 77aa (‘‘Schedule A’’).

59

Section 7(a)(1) states that a registration

statement ‘‘shall contain’’ the information in

Schedule A, not that the Commission is

‘‘authorized’’ to require it, as the Adopting Release

claimed. Contra Adopting Release at 21683.

60

15 U.S.C. 77g(a)(1). Section 19(a) of the

Securities Act similarly empowers the Commission

to ‘‘prescribe . . . the items or details to be shown’’

in a registrant’s ‘‘balance sheet and earning

statement.’’ 15 U.S.C. 77s(a).

61

15 U.S.C. 78l(b)(1) (‘‘section 12(b)(1)’’).

62

Id.

63

15 U.S.C. 78l(c) (‘‘section 12(c)’’) (‘‘If in the

judgment of the Commission any information

required under subsection (b) . . . is inapplicable

to any specified class or classes of issuers, the

Commission shall require in lieu thereof the

submission of such other information of comparable

character as it may deem applicable to such class

of issuers.’’).

64

15 U.S.C. 78m(a) (‘‘section 13(a)’’). The

Commission may require an issuer meeting the

terms of section 15(d)(1) of the Exchange Act, 15

U.S.C. 78o(d)(1), to file information and documents

required pursuant to section 13 in respect of a

security registered pursuant to section 12.

65

15 U.S.C. 78m(a)(1).

66

See 15 U.S.C. 78m(a)(2).

67

15 U.S.C. 78m(a). 15 U.S.C. 78m(b)(1) provides

that rules ‘‘in regard to reports’’ may prescribe the

form of the reports and certain accounting items,

such as the details for a balance sheet and valuation

methods for, among other things, assets, liabilities,

and depreciation. Section 19(a) of the Securities Act

similarly provides the Commission with authority

to prescribe disclosure of the same list of

accounting items and details.

68

15 U.S.C. 78m(c). Section 23(a)(1) of the

Exchange Act—the other main provision of the

Exchange Act cited in the Adopting Release—

empowers the Commission to ‘‘make such rules and

Continued

corporate governance to the States to

regulate, and it has spoken clearly on

the rare occasions when it has shifted

that balance.

51

As discussed below, the Final Rules

do not satisfy the statutory criteria for

adopting additional disclosure

provisions under the Securities Act or

Exchange Act. The disclosures

compelled by the Final Rules are not

within the scope of the categories of

disclosures Congress required and do

not comport with the directives

Congress set for excepting from,

substituting, or adding to those

disclosures. They also improperly

intrude on State corporate law without

a statutory directive. Accordingly, we

propose to rescind the Final Rules in

their entirety.

1. Scope of the Commission’s Disclosure

Authority

We first examine the text and context

of Congress’s directions on mandatory

disclosures and then consider the

Commission’s ability to make changes to

them. The main statutory provisions

discussed in the Adopting Release were

sections 7(a)(1)

52

and 19(a)

53

of the

Securities Act and sections 12,

54

13

55

and 23(a)(1)

56

of the Exchange Act.

57

a. Text of the Disclosure Rulemaking

Statutes in the Securities Act and

Exchange Act

Section 7(a)(1) of the Securities Act

establishes that Schedule A

58

is the

base disclosure for a registration

statement and also permits the

Commission to except from or add to

the disclosure requirements enumerated

in Schedule A. Section 7(a)(1) provides

that a registration statement for a public

offering ‘‘shall contain the information’’

and documents ‘‘specified in Schedule

A’’ of the Securities Act.

59

Schedule A

contains 32 disclosure items, such as

the business of the company, its capital

structure, use of proceeds from the sale

of securities, director and officer

compensation, material contracts, the

terms of the offering and detailed

balance sheet and profit or loss

statements.

Section 7(a)(1) gives the Commission

the authority to except from or add to

Schedule A’s required disclosures in

certain circumstances. The Commission

may by rule provide that a class of

issuers does not need to include

information listed in Schedule A if the

Commission finds that the information

is not applicable to that class ‘‘and that

disclosure fully adequate for the

protection of investors is otherwise

required to be included within the

registration statement.’’ Section 7(a)(1)

concludes with a provision authorizing

the Commission to add disclosure

requirements to Schedule A: ‘‘Any such

registration statement shall contain such

other information, and be accompanied

by such other documents, as the

Commission may by rules or regulations

require as being necessary or

appropriate in the public interest or for

the protection of investors.’’

60

Section 12 of the Exchange Act

similarly requires certain categories of

disclosures while allowing the

Commission to prescribe the level of

detail and to alter the requirements

under specified conditions. Section 12

stipulates the information to be filed

and made public by a company

registering a class of securities on a

national securities exchange or that is

required to register a class of equity

securities under the Exchange Act.

Section 12(b)(1) provides that a

registration statement must contain 12

enumerated categories of information,

such as the financial structure and

nature of the business, the terms of

classes of securities, the financial

interests of directors and officers in the

company, certain material contracts,

and certain financial statements.

61

Within those 12 categories, the

Commission may require a registration

statement to include ‘‘[s]uch

information, in such detail,’’ as to the

issuer and any control persons ‘‘as

necessary or appropriate in the public

interest or for the protection of investors

....’’

62

Section 12(c) gives the Commission

the authority to determine that an item

listed in section 12(b) is not applicable

to a class of issuers. If it does, ‘‘the

Commission shall require in lieu thereof

the submission of such other

information of comparable character as

it may deem applicable to such class of

issuers.’’

63

Unlike section 7(a)(1) of the

Securities Act, section 12 of the

Exchange Act does not otherwise permit

the Commission to add to the list of

disclosure items in section 12(b).

Section 13(a) of the Exchange Act

provides the Commission with authority

to prescribe periodic disclosure rules for

issuers with securities registered under

section 12.

64

The Commission shall

require such an issuer ‘‘to keep

reasonably current the information and

documents required to be included in or

filed with’’ an application or registration

statement

65

and may require the issuer

to file annual and quarterly reports.

66

Any rules promulgated under section 13

must be ‘‘necessary or appropriate for

the proper protection of investors and to

insure fair dealing in the security.’’

67

As

with section 12(c), section 13(c)

instructs that if the Commission

concludes ‘‘any report required under

subsection (a) in inapplicable to any

specified class or classes of issuers, the

Commission shall require in lieu thereof

the submission of such reports of

comparable character as it may deem

applicable ....’’

68

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regulations as may be necessary or appropriate to

implement the provisions of this chapter for which

[it] [is] responsible or for the execution of functions

vested in [it] by this chapter, and may for such

purposes classify persons, securities, transactions,

statements, applications, reports, and other matters

within [its] . . . jurisdiction[ ], and prescribe

greater, lesser, or different requirements for

different classes thereof.’’ 15 U.S.C. 78w(a)(1). This

provision’s general terms do not affect the specific

disclosure-related authority discussed above.

69

15 U.S.C. 77g(a)(1); see also 15 U.S.C. 77s

(allowing the Commission to prescribe ‘‘the items

or details to be shown in the balance sheet and

earning statement’’ as part of its authority to

prescribe ‘‘such rules and regulations as may be

necessary to carry out the provisions of this title,

including rules and regulations governing

registration statements and prospectuses’’).

70

15 U.S.C. 77g(a)(1).

71

15 U.S.C. 78l(b)(1) (the application ‘‘shall

contain’’ ‘‘[s]uch information, in such detail . . . as

the Commission may by rules and regulations

require, as necessary or appropriate in the public

interest or for the protection of investors, in respect

of’’ those enumerated categories).

72

15 U.S.C. 78l(c).

73

FCC v. Consumers’ Rsch., 606 U.S. 656, 690

(2025); see also Circuit City Stores, Inc. v. Adams,

532 U.S. 105, 115 (2001) (open-ended terms in a

statutory provision should be ‘‘controlled and

defined by reference to the enumerated categories’’

in that provision, covering only objects ‘‘similar in

nature’’ to those enumerated categories).

74

15 U.S.C. 78l(b)(1).

75

15 U.S.C. 78l(c). In keeping with these

limitations, courts have struck down attempts to

impose disclosures that expand beyond those

targeting the Exchange Act’s core concerns—

guarding against, among other things, ‘‘speculation,

manipulation, fraud, [and] anticompetitive

exchange behavior’’—as exemplified by Congress’s

enumerated categories of information. Alliance for

Fair Board Recruitment v. SEC, 125 F.4th 159, 164,

178 (5th Cir. 2024) (en banc) (invalidating SEC

approval of Nasdaq rules requiring Nasdaq-listed

companies to ‘‘disclose information about the

racial, gender, and sexual characteristics of their

directors’’).

76

See supra note 49.

77

NAACP v. Fed. Power Comm’n, 425 U.S. 662,

669 (1976); see also Bus. Roundtable v. SEC, 905

F.2d 406, 413 (D.C. Cir. 1990) (explaining that

statutory language about the ‘‘public interest’’

‘‘must be limited to ‘the purposes Congress had in

mind when it enacted [the] legislation’’’ (quoting

NAACP, 425 U.S. at 670); see generally Consumers’

Rsch., 606 U.S. at 690 (explaining that the Supreme

Court has ‘‘long held that ‘the words ‘public

interest’ in a regulatory statute do not encompass

‘the general public welfare’ but rather ‘take meaning

from the purposes of the regulatory legislation’’’)

(quoting NAACP, 425 U.S. at 669).

78

See Davis v. Mich. Dep’t of Treasury, 489 U.S.

803, 809 (1989) (explaining that ‘‘statutory language

cannot be construed in a vacuum,’’ but rather ‘‘the

words of a statute must be read in their context and

with a view to their place in the overall statutory

scheme’’).

79

See supra note 73 and accompanying text.

80

Nat’l Fed’n of Indep. Bus. v. Dep’t of Lab.,

Occupational Safety & Health Admin., 595 U.S.

109, 126 (2022) (Gorsuch, J. concurring) (quoting

These statutory provisions establish

the Commission’s power to compel

disclosures in public offerings and by

companies registering securities for

public trading. Congress restricted the

information an issuer or reporting

company must disclose to items central

to an understanding of the company’s

business or financial characteristics.

These categories of information are

fundamental to valuing the risks and

returns of an investment in the

registrant’s securities.

b. The Commission’s Authority To

Change Mandatory Disclosures

As noted above, Congress permitted

the Commission to make changes to the

mandatory disclosures within certain

limits. In this way, Congress

contemplated developments in

mandatory disclosure requirements but

gave context and guidance for them in

the governing statutes.

The relevant part of section 7(a)(1) of

the Securities Act states that the

Commission may require the disclosure

of ‘‘such other information’’ not

adequately covered by Schedule A if

such item is ‘‘necessary or appropriate

in the public interest or for the

protection of investors.’’

69

Section

7(a)(1) also provides that the

Commission may exclude from or adopt

a substitute for an item in Schedule A

for a class of issuers if it finds the item

is not applicable and ‘‘that disclosure

fully adequate for the protection of

investors is otherwise required to be

included within the registration

statement.’’

70

Section 12(b)(1) of the

Exchange Act authorizes the

Commission to determine the ‘‘detail’’

for the twelve enumerated categories of

disclosures listed by Congress for

applications to register securities on an

exchange or in certain other

circumstances.

71

And if one of those

enumerated categories ‘‘is inapplicable

to any specified class or classes of

issuers,’’ the Commission ‘‘shall require

in lieu thereof the submission of such

other information of comparable

character as it may deem applicable to

such class of issuers,’’

72

closely tying

the Commission’s power to modify the

required disclosures to Congress’s

original specifications. Under section

13(a) of the Exchange Act, the

Commission has authority to prescribe

rules requiring issuers with securities

registered under section 12 ‘‘to keep

reasonably current’’ the information and

documents required by section 12(b)(1)

for the registration statement and to file

annual and quarterly reports.

The Securities Act and Exchange Act

work together in certain circumstances.

Experience with disclosures of reporting

companies under section 12 of the

Exchange Act may inform the

Commission about the need for or

inapplicability of disclosures under

section 7(a)(1) of the Securities Act.

Detailed disclosures or disclosures of

comparable character or current

information added under section 12 for

reporting companies may also guide the

Commission’s determination about

disclosures necessary for the protection

of investors in a registration statement

required by the Securities Act. This

interrelationship between statutory

provisions provides the foundation for

the Commission’s existing integrated

disclosure system.

The Commission’s rulemaking with

respect to disclosures must be

‘‘channel[ed]’’ by and comparable to the

kinds of disclosures recited in the

statutes,

73

which refer to a registrant’s

business or financial characteristics.

This follows from the text of the

Commission’s enabling statutes. As

previously discussed, section 12 of the

Exchange Act authorizes the

Commission to specify the ‘‘detail[s]’’

surrounding Congress’s chosen topics

74

and to substitute those topics with

others for certain issuers—provided

(among other things) that those

substitute disclosures are ‘‘in lieu of’’

Congress’s specified fields and ‘‘of

comparable character.’’

75

Other requirements in sections 7(a)(1),

12(b)(1), and 13(a) also guide the

Commission in exercising its authority

to adopt disclosure rules. The

Commission must determine that a rule

is ‘‘necessary or appropriate in the

public interest or for the protection of

investors.’’ That public interest

determination also requires

consideration of efficiency, competition,

and capital formation.

76

To be

necessary, an addition to required

disclosures should cover information

not adequately elicited by an existing

mandatory disclosure. To be

appropriate, the additional disclosures

must elicit information comparable to

that elicited by the disclosures specified

by Congress.

Courts have consistently held that the

inclusion of the ‘‘words ‘public interest’

in a regulatory statute is not a broad

license to promote the general public

welfare. Rather, the words take meaning

from the purposes of the regulatory

legislation.’’

77

The purposes, in turn,

are discerned from the text and context

of a statute, which limits the scope of

what is necessary or appropriate.

78

For

mandatory disclosures in public

offerings or periodic reports, this means

that any additional, substitute, or more

detailed disclosure requirements must

be related to the registrant’s business or

financial characteristics.

79

Congress did

not license the agency to act as a

‘‘roving commission to inquire into [the]

evils’’ of corporate behavior ‘‘and upon

discovery correct them.’’

80

Indeed, the

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A.L.A. Schechter Poultry Corp. v. United States, 295

U.S. 495, 551 (1935) (Cardozo, J, concurring)).

81

See Davis, 489 U.S. at 809.

82

The Adopting Release used an expansive

notion of ‘‘investor,’’ defining that term to include

not only retail and institutional investors but also

‘‘other market participants (such as financial

analysts, investment advisers, and portfolio

managers) that use disclosures in Commission

filings as part of their analysis to help investors.’’

Adopting Release at 21671 n.26.

83

See, e.g., Adopting Release, section II.A.1.a.

84

Indeed, the Supreme Court recently rejected an

authority analysis similar to the one used to support

the Final Rules. See Ala. Ass’n of Realtors v. Dep’t

of Health & Hum. Servs., 594 U.S. 758, 763–765

(2021). In that case, in an action seeking to vacate

the stay of a district court judgment, the Court

examined whether the CDC exceeded its authority

by issuing a moratorium on evictions during the

COVID–19 pandemic. The Court concluded that the

CDC likely exceeded its authority by instituting the

eviction moratorium because the CDC interpreted

the Public Health Service Act too broadly. The

Court explained that statutory language should be

read in context and succeeding sentences in a

statute can inform grants of authority that appear in

prior sentences.

85

See, e.g., Adopting Release, section IV.B.1.

86

Contra Adopting Release at 21683.

87

See 17 CFR 230.405 (‘‘material’’ means ‘‘those

matters to which there is a substantial likelihood

that a reasonable investor would attach importance

in determining whether to purchase the security

registered’’); 17 CFR 240.12b–2 (‘‘material’’ means

‘‘those matters to which there is a substantial

likelihood that a reasonable investor would attach

importance in determining whether to buy or sell

the securities registered’’); see also Basic Inc. v.

Levinson, 485 U.S. 224 (1988).

88

See Sean J. Griffith, What’s ‘‘Controversial’’

About ESG? A Theory of Compelled Commercial

Speech Under the First Amendment, 101 Neb. L.

Rev. 876, 881 (2023) (‘‘[F]ocusing on investors qua

investors reveals a common core—specifically,

concern for the financial return of an investment.’’

(emphasis in original)); Eric C. Chaffee, The New

Old SEC, 85 Maryland L. Rev. 468, 492–493 (2026)

(‘‘[Each of the Commission’s governing statutes is]

focused on providing investors with the truthful

material information necessary to make informed

investment decisions, rather than attempting to

protect investors in their day-to-day lives or in

other contexts’’); Comm’r Elad Roisman, Can the

SEC Make ESG Rules that are Sustainable? (June 22,

2021), available at https://www.sec.gov/newsroom/

speeches-statements/can-sec-make-esg-rules-are-

sustainable (‘‘[W]hile any given shareholder may

have bought securities for reasons other than or in

addition to making money, it seems clear that a

‘reasonable investor’ is someone whose interest is

in a financial return on an investment.’’).

89

See Basic Inc., 485 U.S. at 231–32, 234, 238;

see also Matrixx Initiatives, Inc. v. Siracusano, 563

U.S. 27 (2011) (explaining and applying the Basic

Inc. standard of materiality); TSC Indus., Inc. v.

Northway, Inc., 426 U.S. 438, 448–49 (1976)

(adopting a standard of materiality under Exchange

Act Rule 14a–9).

90

17 CFR 229.507.

91

FCC v. Consumers’ Rsch., 606 U.S. 656, 690

(2025).

92

17 CFR 229.404.

fact that Congress required the

Commission to consider efficiency,

competition, and capital formation

when making a public interest

determination further illustrates that

‘‘public interest’’ was not intended to be

construed in some vague, open-ended

sense but rather in terms of the public

interest in well-functioning securities

markets.

Likewise, the words ‘‘protection of

investors’’ do not empower the

Commission to mandate any disclosure

that an investor may find useful or

desirable.

81

In the Adopting Release, the

Commission made general assertions

that climate-related information was

‘‘important’’ to investors

82

and that the

Final Rules would make the disclosures

more consistent, comparable, and

reliable.

83

Those considerations may

play a role in the Commission’s

assessment of whether a potential

disclosure obligation is necessary or

appropriate or promotes efficiency and

capital formation, but they are not a

freestanding statutory authorization to

expand disclosure beyond the types of

information Congress specified. If they

were, there would be no meaningful

limits on the Commission’s statutory

authority.

84

Under such a reading, the

Commission could mandate disclosure

about virtually any topic, however

contentious, esoteric, or parochial,

provided that some subset of investors

may find the information relevant to

their decisions to buy or sell the

registrant’s securities.

Expansive notions of the public

interest and protection of investors do

not provide a basis for straying beyond

the types of business or financial

characteristics that Congress specified.

Generalized invocations of ‘‘importance

to’’ and ‘‘interests of’’ investors or

‘‘investor demand’’

85

are not adequately

grounded in the text, context, and

limitations of the law to provide a basis

for rulemaking. The statutes also do not

mention consistency or comparability as

a basis for a disclosure rule.

Notwithstanding the Commission’s

assertions in the Adopting Release,

these justifications do not authorize the

Commission to ‘‘update and build on’’

the disclosures specified in the Federal

securities laws ‘‘by requiring additional

disclosures of information.’’

86

Materiality is also a key part of the

Commission’s application of legal

authority when it adopts disclosure

rules. Information is material if there is

a substantial likelihood that a

reasonable investor would consider it

important or significant in deciding

whether to buy or sell a security.

87

The

common interest of reasonable investors

is in information regarding the financial

performance of a company, the pricing

of securities, and the prospect for

economic and financial return from the

disclosing company.

88

Accordingly,

materiality is a concept inherently

rooted in financial considerations.

While ‘‘materiality’’ is not referenced

in the statutory provisions that were

relied upon to promulgate the Final

Rules and does not itself provide a

separate basis for a disclosure

obligation, this concept bears directly

on the Commission’s consideration of

investor protection, efficiency, and

capital formation. Immaterial

disclosures do not further the ‘‘public

interest’’ or ‘‘protection of investors’’—

indeed, they are likely to frustrate such

objectives. The materiality standard

filters out information that a reasonable

investor would not consider important,

protects investors from being buried in

an avalanche of trivial information, and

prevents the registrant from having to

collect and disclose every minor detail

about its operations.

89

Therefore,

assuring that mandatory disclosures

elicit material information is frequently

part of the Commission’s required

determination that such disclosures

advance the goals of investor protection,

efficiency, and capital formation.

The Commission’s accepted past

practices illustrate these limits on its

authority in operation. Current

Regulation S–K, for example, contains

instances of the Commission exercising

its authority to adopt disclosure rules

based on enumerated items of

disclosure in Schedule A of the

Securities Act and section 12(b)(1) of

the Exchange Act. For example,

Schedule A requires disclosures about

securities held by officers, directors,

promoters, and large shareholders and

their intention to subscribe to purchases

under the registration statement

(paragraph 7) and the purposes for

which the offered securities will supply

funds (paragraph 13), but Schedule A

does not explicitly require disclosures

about shareholders intending to sell

securities pursuant to the registration

statement. Item 507 of Regulation S–K

90

requires disclosures about the names of

selling shareholders, their material

relationships with the issuer, and the

amount they plan to sell, but these

disclosures are ‘‘channel[ed]’’ by the

kinds of disclosures recited in

paragraphs 7 and 13 of Schedule A.

91

As another example, to address

concerns with managerial self-dealing,

paragraphs 14, 20, 22, and 24 of

Schedule A and section 12(b)(1)(D)

through (F) require disclosures of

remuneration to officers, directors,

underwriters, and ‘‘other persons’’ over

certain dollar amounts and the interests

of directors, officers, and large

shareholders in the securities of the

issuer and material contracts they have

with the issuer. Item 404 of Regulation

S–K,

92

which requires disclosure about

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In formulating a substitute disclosure, the

Commission frequently must consider materiality as

part of its evaluation of efficiency, competition,

capital formation, and the protection of investors,

as discussed below.

94

15 U.S.C. 78l(c).

95

Contra Adopting Release at 21683 n.177 and

accompanying text (quoting Exchange Act section

13(a) [15 U.S.C. 78m(a)]). Section 19(a) of the

Securities Act and section 23(a)(1) of the Exchange

Act confer general rulemaking authority. General

rulemaking authority remains subject to statutory

context and cannot be read to expand the

Commission’s authority to adopt disclosure

regulations beyond the limitations set forth in the

federal securities laws. By their terms, sections

19(a) and 23(a)(1) may be used as necessary ‘‘to

carry out’’ or ‘‘to implement’’ other provisions in

the Securities Act or the Exchange Act and,

therefore, for purposes of disclosure in a

registration statement or periodic report, do not

extend beyond the more specific terms in the

previously discussed statutory provisions. See New

York Stock Exch. LLC v. SEC, 962 F.3d 541, 556

(D.C. Cir. 2020) (‘‘[A] ‘necessary or appropriate’

provision in an agency’s authorizing statute does

not necessarily empower the agency to pursue

rulemaking that is not otherwise authorized.’’).

Thus, the Commission could not have relied on its

general rulemaking power in Securities Act section

19(a) and Exchange Act section 23(a)(1) to adopt the

Final Rules.

96

Consumers’ Rsch., 606 U.S. at 690.

97

See Loper Bright Enterprises v. Raimondo, 603

U.S. 369, 400 (2024) (explaining that ‘‘[i]n the

business of statutory interpretation, if it is not the

best [interpretation], it is not permissible’’).

98

See supra section II.

99

See, e.g., 17 CFR 210.12–29 (mortgage loans on

real estate for certain real estate companies).

100

See 17 CFR 229.1502(b)(3).

101

17 CFR 229.1500.

102

See 17 CFR 229.1502(f).

103

See 17 CFR 229.1502(g).

104

17 CFR 229.1505(a)(1).

105

See Adopting Release at 21875.

106

Id.

transactions with related persons, is not

identical to the enumerated items in

Schedule A, but it is channeled by

Schedule A’s disclosures concerning

managerial self-dealing. Similarly, Item

404 spells out certain details related to

the section 12(b)(1) disclosures.

93

The ability to require substitute or

added disclosures also enables the

Commission to adapt current disclosure

rules for novel financial assets or

transaction structures that qualify as

securities or securities transactions,

subject to the same directives and

guardrails discussed above. For

example, instead of remuneration or

payments to officers, directors, and

promoters, the Commission could

substitute ‘‘information of comparable

character.’’

94

When read in the context of the

mandatory disclosures in sections

7(a)(1) and 12(b)(1), it is clear that these

statutes do not authorize the

Commission to mandate any and all

information that it deems desirable. Nor

does section 13(a) give the Commission

a general, freestanding power to

mandate ongoing disclosures.

95

Rather,

disclosure rules adopted by the

Commission must be ‘‘channel[ed]’’

by

96

and comparable to the disclosures

Congress specified in the Acts, which

concern the registrant’s business or

financial characteristics. Despite

suggestions to the contrary in the

Adopting Release, the Commission is

not free to construct a new disclosure

regime out of whole cloth. In adopting

the Final Rules, the Commission did not

sufficiently adhere to these limits or

determine the best interpretation of the

relevant statutes.

97

Instead, the

Commission relied on an impermissibly

broad reading of its statutory authority.

2. The Final Rules Exceed the

Limitations on Mandatory Disclosures

The Final Rules did not respect the

limitations on the Commission’s

authority and are fundamentally

different from the types of enumerated

disclosures found in the Commission’s

governing statutes. Those enumerated

disclosures refer to a company’s

business or financial characteristics. By

contrast, the Final Rules mandate highly

specific and granular information on the

sole topic of climate-related matters,

such as operational and governance

practices and internal metrics

(including GHG emissions) that many

registrants may not track or use for

business purposes.

98

These disclosure obligations do not fit

within the powers conferred by the

statutes discussed above. While the

Commission in certain other

circumstances has required disclosures

that are tailored to specific risks facing

the disclosing company in a particular

industry,

99

no prior example comes

close to the breadth of disclosures

required by the Final Rules, which

apply across the board. The Final Rules

are not comparable to the disclosures

called for by the Commission’s

governing statutes, which refer to a

company’s business or financial

characteristics.

The subject of each new disclosure

mandated by the Final Rules, by

contrast, was climate-related risks and

strategies for managing those risks, as

well as the financial statement effects of

severe weather events and other natural

conditions. Many of these disclosures

were only secondarily or remotely about

the past or immediate effects of climate-

related matters on the operations,

revenue, expenses, capital structure,

liquidity, management or controlling

shareholders of the registrant. For

example, the Final Rules require

disclosure about climate-related impacts

on third parties (such as suppliers,

purchasers, or counterparties to material

contracts)

100

as well as transition

risks—defined expansively to include,

among other things, ‘‘the actual or

potential negative impacts on a

registrant’s business . . . attributable to

regulatory, technological, and market

changes, . . . changes in law or policy,

reduced market demand for carbon

intensive products, . . . [and]

competitive pressures associated with

the adoption of new technologies, and

reputational impacts ....’’

101

The

Final Rules also require the disclosure

of internal analysis and metrics, such as

scenario analysis

102

and internal carbon

prices.

103

As discussed above, the Commission’s

disclosure authority under its governing

statutes must be construed in light of

the text and context of the surrounding

statutory provisions. Nothing in these

provisions expressly empowers the

agency to burden public companies and

their shareholders with such detailed

(and costly) disclosures about one

particular topic. Indeed, the scope of the

Final Rules stands in stark contrast to

the more limited and targeted

disclosures the Commission has

previously required on environmental

matters, as discussed in section III.C.1.a.

Nor does the inclusion of materiality

qualifiers salvage the Final Rules from

their legal defects. While the Adopting

Release claimed that such qualifiers

would limit the scope, and therefore the

burdens, of the Final Rules, as discussed

in more detail in section III.C.3, the use

of such qualifiers in such a complex,

interconnected, and highly prescriptive

set of disclosure requirements does not

adequately cabin those requirements

within the bounds of the Commission’s

authority. In particular, while the

requirement to disclose Scope 1 and

Scope 2 GHG emissions is qualified by

materiality,

104

it nonetheless requires

covered registrants to devote significant

time and resources to measure their

emissions and determine whether they

are material, including establishing

organizational boundaries and

operational boundaries and adopting a

specific reporting protocol or

standard.

105

Only after it has invested

potentially significant resources to

perform this exercise can a registrant

make a determination about whether

such metrics are material and therefore

must be disclosed.

106

Rather than

limiting the costs and burdens of the

Commission’s emissions reporting

requirements, the rule’s materiality

qualifier effectively compels covered

registrants to track and evaluate a metric

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See 17 CFR.229.1502(e).

108

See 17 CFR.229.1502(f).

109

See 17 CFR.229.1502(g).

110

Adopting Release at 21669, 21671, 21846–48.

111

Release No. 33–9106 (Feb. 2, 2010) [75 FR

6290 (Feb. 8, 2010)] (‘‘2010 Guidance’’).

112

17 CFR 229.303 (Management’s discussion

and analysis of financial condition and results of

operations).

113

See 15 U.S.C. 77g(a)(1); 15 U.S.C. 78l(b)(1); see

also 15 U.S.C. 78m(a) (requiring every issuer of a

security registered pursuant to section 12 to file

certain reports with the Commission in accordance

with such rules and regulations ‘‘as the Commission

may prescribe as necessary or appropriate for the

proper protection of investors and to insure fair

dealing in the security’’).

114

See infra section III.C.1.b.

115

CTS Corp. v. Dynamics Corp. of Am., 481 U.S.

69, 89 (1987); see also Burks v. Lasker, 441 U.S.

471, 478 (1979) (‘‘[T]he first place one must look

to determine the powers of corporate directors is in

the relevant State’s corporation law.’’).

116

See, e.g., Disclosures Pertaining to Matters

Involving the Environment and Civil Rights, Release

No. 33–5170 (July 19, 1971) [36 FR 13989 (July 29,

1971)] (interpreting Commission rules and forms to

require disclosure about ‘‘compliance with statutory

requirements with respect to environmental

quality’’ when such compliance efforts ‘‘may

necessitate significant capital outlays,’’ ‘‘may

materially affect the earning power of the business,’’

or ‘‘cause material changes in [the] registrant’s

business’’); Disclosure with Respect to Compliance

with Environmental Requirements and Other

Matters, Release No. 33–5386 (Apr. 20, 1973) [38 FR

12100 (May 9, 1973) at 12100–01] (adopting

amendments requiring registrants to disclose

material effects of compliance with environmental

laws on the capital expenditures, earnings, and

competitive position of the registrant and

administrative or judicial proceedings arising under

environmental laws if ‘‘material to the business or

financial condition of the registrant’’ or relating to

certain claims exceeding 10% of assets); see also 17

CFR 229.101(c)(2)(i), (h)(4)(xi) (requiring disclosure

of certain material effects of compliance with

environmental regulations).

117

Similarly, the Final Rules contrast with the

approach taken by the Commission in the 2010

Guidance, when it explained that, in certain

circumstances and for some companies, regulatory,

legislative, and other developments related to

climate change ‘‘could have a significant effect on

operating and financial decisions.’’ 2010 Guidance

at 6291. As such, the Commission’s existing

disclosure requirements—like those that require

disclosure of a registrant’s description of its

business, legal proceedings, risk factors, and

management’s discussion and analysis—might

apply to climate-related issues. In contrast to the

Final Rules, these prior initiatives are consistent

with the Commission’s long-held recognition that

types of information ‘‘which are of importance only

in certain circumstances have generally not been

made the subject of specific disclosure

requirements.’’ Environmental and Social

Disclosure Release, infra note 131.

118

See 17 CFR 229.407(h) (‘‘[D]isclose the extent

of the board’s role in the risk oversight of the

registrant, such as how the board administers its

oversight function, and the effect that this has on

the board’s leadership structure.’’).

119

See, e.g., 17 CFR 229.1505 (GHG emissions

metrics). The Adopting Release acknowledges that

in order to comply with 17 CFR 229.1505, most, if

not all, LAFs and AFs that are not EGCs or SRCs

will need to assess or estimate their Scope 1 and

2 emissions to reach a materiality determination. As

a result, these registrants will, to some extent, need

to adopt controls and procedures to assess the

materiality of their Scope 1 and 2 emissions and

determine whether disclosure is required if they do

not already have them in place. Adopting Release

at 21859.

120

17 CFR 229.1502(e).

121

17 CFR 229.1502(f).

122

17 CFR 229.1502(g).

123

17 CFR 229.1505.

124

17 CFR 210.14–02(e).

they may not otherwise use for business

purposes.

Similarly, invoking the impact of

climate-related risks on a registrant’s

business, results of operations, or

financial condition is not sufficient, in

itself, to justify the Final Rule’s myriad

highly specific disclosure requirements.

For example, the Final Rules require

registrants to provide disclosures

regarding their use of transition

plans,

107

scenario analysis,

108

and

internal carbon prices, if material.

109

The Adopting Release repeatedly

asserted that such disclosures were

necessary to value a registrant’s

securities or evaluate its financial

performance,

110

but the exceedingly

granular nature of the information

required by the Final Rules goes well

beyond what must be disclosed in

respect of the many other factors that

may affect the valuation of a registrant’s

securities. As noted above, to be

necessary, an addition to required

disclosures should cover material

information not adequately elicited by

an existing mandatory disclosure. When

climate change or other environmental

issues, including transition risk, have

materially affected the operations or

financial performance of a specific

company, existing disclosure rules

require discussion of the effects. Indeed,

the Commission’s Guidance Regarding

Disclosure Related to Climate

Change

111

lists a variety of specific

existing disclosure obligations that,

depending on the particular

circumstances of a company, could

require disclosure of climate change

matters. For example, Item 303 of

Regulation S–K requires, among other

things, a company to disclose and

discuss any known trend or uncertainty

that has had a material positive or

negative consequence for the company’s

results of operations.

112

The fact that

existing disclosure obligations already

serve to provide investors with material

information about climate-related

matters reinforces the conclusion that

the Final Rules are not ‘‘necessary’’ to

protect investors.

113

Indeed, they may

even serve to harm investors by eliciting

information about climate-related

matters that goes well beyond what a

reasonable investor needs to make an

informed investment decision.

114

In addition to creating a disclosure

regime far beyond the kind authorized

by the Commission’s enabling statutes,

the Final Rules also intrude on State

authority over core matters of corporate

governance. ‘‘No principle of

corporation law and practice is more

firmly established than a State’s

authority to regulate domestic

corporations.’’

115

Although the Final

Rules purport to require issuers only to

disclose information, the effect of their

requirements is to impermissibly

regulate issuers’ internal affairs. The

many ‘‘ifs’’ in the Final Rules are telling

in this regard. While framed in terms of

risks to and impacts on the registrant,

the disclosure mandates in the Final

Rules effectively provide an aspirational

framework for how public companies

should manage climate-related matters.

The Commission’s existing rules

typically require disclosure of ongoing

compliance or legal matters when they

are material—they do not pressure or

require registrants to create and

maintain dedicated risk management

systems that prioritize one category of

risks above all others.

116

By contrast, the

Final Rules create a highly detailed and

prescriptive regime focused on a single

category of risk.

117

For example, the

Final Rules require disclosure of the

board of directors’ role in managing

climate-related risks, which overlaps

with existing disclosure requirements

related to the role of the registrant’s

board in risk oversight.

118

In addition,

while materiality qualifiers were added

at the adopting stage, given the detailed

nature of the requirements, the Final

Rules effectively require many

registrants to conduct new analyses or

gather new data for the sole purpose of

determining whether they have a

disclosure obligation.

119

To house these extensive new

reporting requirements, the Commission

created a new subpart 1500 of

Regulation S–K as well as a new Article

14 of Regulation S–X. Each of these

regulations contain detailed line item

requirements related to such varied

matters as transition plans,

120

scenario

analysis,

121

internal carbon prices,

122

GHG emissions,

123

and the aggregate

amount of carbon offsets and RECs

expensed.

124

Most of these items apply

equally across all types of registrants.

The anticipated response of registrants

to the creation of such a detailed regime

dedicated to a single category of risks is

clear: all registrants will pay attention to

climate-related matters and dedicate

significant board, executive, and

employee resources to manage them.

This broad mandate interferes with the

management of companies and trenches

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Cf. Bus. Roundtable v. SEC, 905 F.2d 406,

411–412 (D.C. Cir. 1990) (rejecting effort by

Commission ‘‘to establish a federal corporate law by

using access to national capital markets as its

enforcement mechanism’’).

126

See, e.g., Exchange Act section 10A(m)

(directing the Commission to adopt rules requiring

national securities exchanges to prohibit the listing

of any security of an issuer that does not meet

certain specified requirements related to audit

committee procedures and independence) [15

U.S.C. 78j–1(m)]; Exchange Act section 10C(f)

(directing the Commission to adopt rules to direct

national securities exchanges and national

securities associations to prohibit the listing of any

security of an issuer that is not in compliance with

specified requirements related to compensation

committees) [15 U.S.C. 78j–3(f)]; Exchange Act

section 14B (directing the Commission to adopt

rules requiring disclosure of the reasons why the

issuer has chosen the same person to serve as

chairman of the board of directors and chief

executive officer or different individuals to serve as

chairman of the board of directors and chief

executive officer) [15 U.S.C. 78n–2]. Around the

same time that Congress enacted the Securities Act

and Exchange Act, it also enacted the Public

Utilities Holding Company Act of 1935 [15 U.S.C.

79 et seq. (repealed 2005)] (‘‘PUHCA’’). Although

now repealed, PUHCA provided the Commission

with extensive power to refashion the structure and

business practices of an entire industry. See, e.g.,

Am. Power & Light Co. v. SEC, 329 U.S. 90 (1946)

(upholding the Commission’s authority under

PUHCA to require that each registered holding

company, and each subsidiary company thereof,

take such steps as the Commission shall find

necessary to ensure that the corporate structure or

continued existence of any company in the holding-

company system does not unduly or unnecessarily

complicate the structure, or unfairly or inequitably

distribute voting power among security holders, of

such holding-company system). PUHCA thus stood

in sharp contrast to the two prior federal securities

laws, which focused on disclosure. The history of

PUHCA demonstrates that Congress knows how to

empower the agency to intervene in internal

corporate affairs when it wishes to do so.

127

See 15 U.S.C. 78l(b)(1)(D); 17 CFR 240.14a–

101.

128

Ala. Ass’n of Realtors v. Dep’t of Health &

Hum. Servs., 594 U.S. 758, 764 (2021) (‘‘Our

precedents require Congress to enact exceedingly

clear language if it wishes to significantly alter the

balance between federal and state power . . . .’’)

(quoting U.S. Forest Serv. v. Cowpasture River Pres.

Ass’n, 590 U.S. 604, 621–622 (2020)).

129

Nat’l Fed’n of Indep. Bus. v. Dep’t of Lab.,

Occupational Safety & Health Admin., 595 U.S.

109, 119 (2022).

130

Adopting Release at 21685.

131

See, e.g., Environmental and Social

Disclosure, Release No. 33–5627 (Oct. 14, 1975) [40

FR 51656 (Nov. 6, 1975)] (‘‘Environmental and

Social Disclosure Release’’). In the Environmental

and Social Disclosure Release, the Commission

discussed commenters’ interest in registrants’

disclosures of the environmental impact of their

activities. Id. at 51663. The Commission noted that

those ‘‘who supported social disclosure were

virtually unanimous in stating that . . .

environmental, . . . or other social information is

in fact economically significant.’’ Id. at 51664. The

Commission noted that the ‘‘majority’’ of investors

who commented indicated that such information

might play a role in how they voted on shareholder

proposals, while a ‘‘lesser number’’ indicated that

they would take this data into account in

determining what securities to purchase, hold, or

sell, and that many of the religious institutions that

commented stated they would use such information

in deciding whether to engage with management to

‘‘change some policy.’’ Id. The Commission

concluded that ‘‘[a]t this time, therefore, it appears

that those investors who are interested in social

disclosures would use this information more in

making voting rather than investment decisions.’’

Id. at 51665.

132

42 U.S.C. 4321 et seq.

133

Environmental and Social Disclosure Release

at 51656.

134

Id. at 51660.

135

See id. at 51658.

136

Id. at 51667.

137

See Business and Financial Disclosure

Required by Regulation S–K, Release No. 33–10064

(Apr. 13, 2016) [81 FR 23916 (Apr. 22, 2016)]

(‘‘Regulation S–K Concept Release’’).

138

Id. at 23971 (footnote omitted).

139

Id. (‘‘The current statutory framework for

adopting disclosure requirements remains generally

upon the traditional role of States in

regulating corporations.

125

On the rare occasions when Congress

has intervened in corporate governance,

it has given explicit direction for the

Commission to do so.

126

Congress has

not done so with respect to management

of climate-related matters. Such a

conduct-altering regime, unrelated to

managerial self-dealing,

127

simply was

not contemplated by Congress when it

specified the fundamental disclosures

that a registrant should provide when

conducting a public offering in the

United States or trading in U.S. markets.

This effort to regulate corporate

management interferes with the role of

the States in regulating corporate

governance and contravenes the ‘‘clear

statement’’ rule that the Supreme Court

applies when regulatory actions raise

federalism concerns.

128

The past practices the Commission

cited in the Adopting Release also do

not justify the Final Rules. According to

the Supreme Court, ‘‘[i]t is telling’’

when an agency that ‘‘has never before

adopted a broad . . . regulation’’ over

many decades now seeks to do so,

suggesting ‘‘that the mandate extends

beyond the agency’s legitimate

reach.’’

129

Until the Final Rules, the

Commission had never before adopted a

sweeping set of disclosure requirements

on climate-related issues; indeed, in

prior years, it specifically declined to do

so.

In adopting the Final Rules, the

Commission pointed as precedent to

environmental disclosure requirements

first adopted in the 1970s, asserting that

‘‘the Commission for the last fifty years

has also required disclosure about

various environmental matters.’’

130

But

a complete and balanced reading of the

record from the 1970s about

environmental disclosures tells a

different story. The dominant themes

from the Commission at the time were

doubts about its powers and how

investors would use Commission-

mandated environmental disclosures.

131

The narrow disclosures adopted in

the 1970s were in response to a specific

congressional directive contained in the

National Environmental Policy Act of

1969 (‘‘NEPA’’),

132

which required the

Commission and other Federal agencies

to develop procedures to consider

environmental values in decision-

making. In 1975, in considering its

obligations under NEPA, the

Commission noted that ‘‘it is generally

not authorized to consider the

promotion of social goals unrelated to

the objectives of the Federal securities

laws.’’

133

It further observed that ‘‘the

discretion vested in the Commission

under the Securities Act and the

Securities Exchange Act to require

disclosure which is necessary or

appropriate ‘in the public interest’ does

not generally permit the Commission to

require disclosure for the sole purpose

of promoting social goals unrelated to

those underlying these Acts.’’

134

Rather,

disclosure mandates under the Federal

securities laws had to relate to the

financial condition of, and matters of

economic significance to, the disclosing

company.

135

The Commission therefore proposed

and ultimately adopted a small number

of narrow rules generally consistent

with the disclosure framework in the

Federal securities laws. For example,

under the 1975 amendments, a reporting

company must disclose material effects

on capital expenditures, earnings, and

competitive position from compliance

with government environmental

regulation.

136

The 1975 rules did not

include disclosure about environmental

strategies or plans or board oversight of

environmental risks; nor did they

include expansive requirements that

companies track and assess the

environmental impact of their

operations.

As recently as 2016, the Commission

reconsidered its authority to require

disclosures on environmental and social

issues as part of a concept release on the

business and financial disclosure

requirements in Regulation S–K.

137

Summarizing its 1975 conclusion on

lack of statutory authority, the

Commission observed that, in 1975,

following extensive proceedings on

these topics, the Commission concluded

that it ‘‘generally is not authorized to

consider the promotion of goals

unrelated to the objectives of the federal

securities laws when promulgating

disclosure requirements, although such

considerations would be appropriate to

further a specific congressional

mandate.’’

138

The Commission also

observed that, since 1975, Congress had

not given new statutory authority for

disclosures in these areas.

139

While the

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consistent with the framework that the Commission

considered in 1975.’’).

140

Specifically, the Commission: (i) refocused the

regulatory compliance disclosure requirement by

including as a topic all material government

regulations, not just environmental laws; and (ii)

implemented a modified disclosure threshold that

increased the existing quantitative threshold for

disclosure of environmental proceedings to which

the government is a party from $100,000 to

$300,000, but that also affords a registrant the

flexibility to select a different threshold that it

determines is reasonably designed to result in

disclosure of material environmental proceedings,

provided that the threshold does not exceed the

lesser of $1 million or one percent of the current

assets of the registrant and its subsidiaries on a

consolidated basis. See Modernization of

Regulation S–K, Items 101, 103, and 105, Release

No. 33–10825 (Aug. 26, 2020) [85 FR 63726 (Oct.

8, 2020)].

141

Util. Air Regul. Grp. v. EPA, 573 U.S. 302, 324

(2014) (quoting FDA v. Brown & Williamson

Tobacco Corp., 529 U.S. 120, 160 (2000)) (quotation

marks omitted).

142

West Virginia v. EPA, 597 U.S. 697, 723 (2022)

(‘‘We presume that Congress intends to make major

policy decisions itself, not leave those decisions to

agencies.’’ (citation and quotation marks omitted)).

143

Id. at 724–25 (citations and quotation marks

omitted).

144

Id. at 729 (citation, quotation marks, and

brackets omitted); see also Biden v. Nebraska, 600

U.S. 477, 518 (2023) (Barrett, J., concurring)

(‘‘Another telltale sign that an agency may have

transgressed its statutory authority is when it

regulates outside its wheelhouse.’’).

145

Ala. Ass’n of Realtors v. Dep’t of Health &

Hum. Servs., 594 U.S. 758, 764 (2021); see also

Santa Fe Indus., Inc. v. Green, 430 U.S. 462, 479

(1977) (rejecting an interpretation of 17 CFR

240.10b–5 (‘‘Rule 10b–5’’) that ‘‘would overlap and

quite possibly interfere with state corporate law’’);

Bus. Roundtable v. SEC, 905 F.2d 406, 408 (D.C.

Cir. 1990) (‘‘[T]he Exchange Act cannot be

understood to include regulation of an issue that is

so far beyond matters of disclosure . . . and that is

concededly a part of corporate governance

traditionally left to the states.’’); All. for Fair Bd.

Recruitment v. SEC, 125 F.4th 159, 180 (5th Cir.

2024) (stating that ‘‘no part of the Exchange Act

even hints at SEC’s purported power to remake

corporate boards using diversity factors’’);

Environmental and Social Disclosure Release at

51660 (‘‘Although disclosure requirements may

have some indirect effect on corporate conduct, the

Commission may not require disclosure solely for

this purpose.’’). We discuss how the Final Rules

reflect an impermissible intrusion into the domain

of State corporate law earlier in this section.

146

West Virginia v. EPA, 597 U.S. at 736

(Gorsuch, J., concurring).

147

See Michael Jones-Correa, Idea #23, Climate

Change as a Political Problem, Impact, Value &

Sustainable Bus. Initiative, Wharton Sch., Univ. of

Penn. (Aug. 16, 2019), available at https://impact.

wharton.upenn.edu/climate-center/climate-change-

as-a-political-problem/ (stating that ‘‘climate change

is as much a political problem as it is a scientific

or technical one’’); Elaine Kamarck, The

Challenging Politics of Climate Change, Brookings

Inst. (Sept. 23, 2019), available at https://

www.brookings.edu/articles/the-challenging-

politics-of-climate-change/ (stating that ‘‘climate

change remains the toughest, most intractable

political issue we, as a society, have ever faced’’);

see also Cong. Budget Off., The Risks of Climate

Change to the United States in the 21st Century

(Dec. 2024), available at https://www.cbo.gov/

publication/61146 (setting forth how climate

change could affect, among other things, GDP, real

estate and financial markets, and the Federal

budget).

148

West Virginia v. EPA, 597 U.S. at 729.

149

Util. Air Regul. Grp. v. EPA, 573 U.S. 302, 324

(2014); see id. (‘‘The power to require permits for

the construction and modification of tens of

thousands, and the operation of millions, of small

sources nationwide falls comfortably within the

class of authorizations that we have been reluctant

to read into ambiguous statutory text.’’).

150

See 17 CFR 229.1505(a).

151

See 17 CFR.229.1502(e).

152

See 17 CFR.229.1502(f).

153

See 17 CFR.229.1502(g).

154

See 17 CFR 229.1501(a).

155

Adopting Release at 21875.

Commission in 2016 stated that the

‘‘role of sustainability and public policy

information in investors’ voting and

investment decisions may be evolving’’

and solicited comment on the need for

new sustainability and social

disclosures, it also noted concerns about

such disclosures and ultimately

determined in 2020 to revise, but not

significantly expand upon, the

provisions adopted in 1975.

140

In sum, until the Final Rules, the

Commission has consistently declined

to use its statutory authority to mandate

expansive environmental disclosures;

instead, the Commission has required

certain targeted disclosures about

regulatory compliance and legal liability

that directly bear on the financial

condition of the disclosing company.

The rulemaking in the 1970s does not

support the Commission’s statutory

authority to issue the Final Rules, which

stray beyond those limits. It is precedent

against that authority.

Finally, and for similar reasons, the

major questions doctrine further

demonstrates that the Commission

lacked authority to promulgate the Final

Rules. The Supreme Court has held that

agencies must have clear authorization

from Congress when embarking on a

new and expansive regulation of a

substantial policy area of ‘‘vast

economic and political significance.’’

141

Political controversies are for Congress

to resolve, not administrative agencies

with limited delegated authority.

142

In

addition, when ‘‘agencies assert[ ] highly

consequential power beyond what

Congress could reasonably be

understood to have granted,’’ or

‘‘claim[ ] to discover in a long-extant

statute an unheralded power

representing a transformative expansion

[of] . . . regulatory authority,’’ ‘‘there is

every reason to hesitate before

concluding that Congress meant to

confer’’ the power claimed.

143

Moreover, ‘‘[w]hen an agency has no

comparative expertise in making certain

policy judgments, . . . Congress

presumably would not task it with

doing so.’’

144

Finally, an intrusion ‘‘into

an area that is the particular domain of

State law,’’

145

also provides a strong

indicator that, ‘‘absent a clear

statement’’ from Congress, a Federal

agency has exceeded its statutory

authority.

146

These indicia that the Commission

transgressed the limits of its statutory

authority under the major questions

doctrine are all present here. Whether

and how public companies should

respond to the perceived causes and

effects of climate change is

unquestionably of ‘‘vast economic and

political significance’’;

147

answering

those questions, even with respect to

disclosure, requires ‘‘balancing the

many vital considerations of national

policy implicated in how Americans

will get their energy.’’

148

And as

explained above, while the Final Rules

purport to require only disclosure, the

effect of their requirements is to

impermissibly regulate issuers’ internal

affairs. In this regard, the Final Rules

stray into areas far beyond the

Commission’s comparative expertise.

Moreover, by effectively mandating

certain risk management practices, the

Final Rules intrude on an area—

corporate governance—traditionally

governed by State law. Thus, the major

questions doctrine applies to the Final

Rules, but as explained in the preceding

section, the Commission’s authorizing

statutes do not provide the needed

clarity to justify such a dramatic

expansion of regulatory authority.

The assertion of regulatory power

under the Final Rules represents a

‘‘transformative expansion in [the

Commission’s] regulatory authority.’’

149

For example, the Final Rules require

LAFs and AFs to disclose their Scope 1

emissions and/or Scope 2 emissions, if

material, separately, each expressed in

the aggregate, in terms of CO

2

e.

150

In

addition, the Final Rules require

registrants to provide disclosures

regarding their use of transition

plans,

151

scenario analysis,

152

and

internal carbon prices, if material,

153

as

well as descriptions of their board of

directors’ oversight of climate-related

risks, regardless of materiality.

154

The

scope of that expansion is reflected in

the costs that the Commission estimated

the Final Rules will impose on

registrants. The Commission estimated

that annual compliance costs per

registrant averaged over the first ten

years of compliance could range from

less than $197,000 to over $739,000.

155

Updating these figures for inflation and

aggregating them across all affected

registrants, we estimate that rescinding

the Final Rules could generate

annualized savings of about $4.9 billion

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156

See infra section IV.C.3.

157

See, e.g., Letter from United States Senators

Pat Toomey, Richard Shelby, Mike Crapo, Tim

Scott, M. Michael Rounds, Thom Tillis, John

Kennedy, Bill Hagerty, Cynthia Lummis, Jerry

Moran, Kevin Cramer & Steve Daines (Jun. 15,

2022), https://www.sec.gov/comments/s7-10-22/

s71022-20133994-303877.pdf (‘‘Addressing matters

like global warming requires political decisions

involving tradeoffs. In a democratic society, those

tradeoffs must be made by elected representatives,

who are accountable to the American people, not

unelected financial regulators.’’).

158

See, e.g., S. 1217, 117th Cong. (‘‘Climate Risk

Disclosure Act of 2021’’); H.R. 2570, 117th Cong.

(‘‘Climate Risk Disclosure Act of 2021’’); H.R. 1187,

117th Cong. (2021) (‘‘Corporate Governance

Improvement and Investor Protection Act’’); S.

3481, 115th Cong. (2018) (‘‘Climate Risk Disclosure

Act’’).

159

FDA v. Brown & Williamson Tobacco Corp.,

529 U.S. 120, 133 (2000).

160

See West Virginia v. EPA, 597 U.S. 697, 729

(2022) (‘‘When an agency has no comparative

expertise in making certain policy judgments, we

have said, Congress presumably would not task it

with doing so.’’ (citations and quotation marks

omitted).

161

42 U.S.C. 7414; see also Am. Elec. Power Co.

v. Connecticut, 564 U.S. 410, 426 (2011) (Congress

delegated to the Environmental Protection Agency

‘‘the decision whether and how to regulate carbon-

dioxide emissions from power plants’’).

162

Biden v. Nebraska, 600 U.S. 477, 518 (2023)

(Barrett, J., concurring).

163

West Virginia v. EPA, 597 U.S. at 723 (citation

omitted).

164

See Adopting Release at 21829. Courts give

varying amounts of weight to such agency

statements. See Nasdaq Stock Mkt. LLC v. SEC, 38

F.4th 1126,1145 (D.C. Cir. 2022); Nat’l Ass’n. Mfrs.

v. SEC, 105 F.4th 802, 815–816 (5th Cir. 2024).

165

See 17 CFR 210.14–01(a) (providing that

Article 14 disclosures are required in filings that are

required to include disclosure pursuant to subpart

1500 of Regulation S–K); see also Adopting Release

at 21779 n.1744 (referencing 17 CFR 210.14–01(a)).

166

Adopting Release at 21670, 21799–21800.

167

See 17 CFR 201.14–02(e)(1).

168

Adopting Release at 21675, 21913.

169

Id. at 21800–01.

170

Encino Motorcars, LLC v. Navarro, 579 U.S.

211, 221 (2016). The Court in Encino Motorcars

further noted that ‘‘[w]hen an agency changes its

existing position, it ‘need not always provide a

more detailed justification than what would suffice

for a new policy created on a blank slate.’ . . . But

the agency must at least ‘display awareness that it

is changing position’ and ‘show that there are good

reasons for the new policy.’ . . . In explaining its

changed position, an agency must also be cognizant

that longstanding policies may have ‘engendered

serious reliance interests that must be taken into

account.’’’ Id. at 221–22 (citing FCC v. Fox

Television Stations, Inc., 556 U.S. 502, 515 (2009)).

per year over the next 10 years for all

affected registrants.

156

As discussed in section III.B.1 and

section III.B.2, Congress has not given

the Commission power to write

regulations requiring such detailed and

extensive disclosure of climate-related

information, let alone to essentially

regulate issuers’ internal affairs through

onerous disclosure requirements. To the

contrary, questions about the country’s

response to climate change generally

and about climate-related disclosures by

public companies specifically continue

to be important and contentious.

Congress is clearly aware of the

potential and claimed risks posed by

climate change, yet it has not legislated

directly nor instructed the Commission

to adopt regulations in response.

157

Instead, Congress has declined to enact

climate-related disclosure legislation.

158

In evaluating an agency’s assertion of

statutory authority, the Supreme Court

has instructed that courts ‘‘must be

guided to a degree by common sense as

to the manner in which Congress is

likely to delegate a policy decision of

such economic and political magnitude

to an administrative agency.’’

159

Common sense would say that the

Securities and Exchange Commission is

not the right agency to deal with the

question of how public companies can

or should respond to climate change

and related matters. The Commission

clearly has no expertise, scientific or

otherwise, related to climate-related

risks or the criteria or analytical

frameworks to be used in evaluating

such risks.

160

Congress has created an

agency—the Environmental Protection

Agency—and tasked that agency with

collecting reports from major emissions

sources and making them available to

the public.

161

In adopting the Final

Rules, the Commission acted well

‘‘outside its wheelhouse.’’

162

Common

sense suggests that Congress would not

allocate authority over climate change

and related matters to the Commission.

In light of the controversy, costs, and

intrusions into the operations of public

companies that would be generated by

mandatory climate-related disclosure

rules, this is a choice for Congress, not

the Commission, to make. That

conclusion is reinforced by the

mismatch between the Commission’s

area of expertise and the subject matter

of climate change. Further, Congress has

not authorized the Commission to

interfere in the corporate governance of

registrants with respect to climate

change. Congress has continued to leave

such corporate governance matters to

the States. The Commission’s asserted

basis for the Final Rules does not satisfy

the clear evidence of congressional

authorization required by the major

questions doctrine. ‘‘Agencies have only

those powers given to them by Congress,

and ‘enabling legislation’ is generally

not an ‘open book to which the agency

[may] add pages and change the plot

line.’ ’’

163

3. The Final Rules Should Be Rescinded

in Their Entirety

Even if the Commission had authority

to adopt some of the Final Rules, the

Final Rules should nevertheless be

rescinded in their entirety. Although the

Commission stated in the Adopting

Release that it intended for the Final

Rules to operate independently,

164

upon

reconsideration, we now conclude that

the individual items of disclosure in the

Final Rules are pieces of a larger whole

and cannot operate sensibly without the

others. For example, the text of the Final

Rules sometimes explicitly connects one

part of the rules to others.

165

In

addition, parts of the Adopting Release

demonstrate the functional inter-

relationship between different

disclosure requirements. For example,

the Adopting Release states that the

financial statement disclosures

‘‘facilitate investors’ assessment of

particular types of’’ climate-related risk

and that there is ‘‘significant overlap’’

between the narrative and financial

statement disclosures.

166

As another

example, Rule 14–02(e)(1) requires

disclosure of costs, expenditures, and

losses for carbon offsets and RECs.

167

The Adopting Release states that these

disclosures are directly connected to ‘‘a

registrant’s plans to achieve its

disclosed climate-related targets or

goals’’

168

and ‘‘will complement the

disclosures required by the amendments

to Regulation S–K and will anchor the

disclosures required outside the

financial statements to those required

within the financial statements.’’

169

As

a result, disclosure under these items is

unlikely to be sensible to investors in

the absence of the other disclosures

mandated by the Final Rules.

C. Policy Reasons for Rescinding the

Final Rules

In addition to (and independent of)

the legal authority defects discussed

above, there are strong policy arguments

for rescinding the Final Rules in their

entirety. As the Supreme Court has

stated, ‘‘[a]gencies are free to change

their existing policies as long as they

provide a reasoned explanation for the

change.’’

170

On reconsideration, we

have determined that the Adopting

Release gave inappropriate weight to

several of the main justifications for

adopting the Final Rules, and we now

reach a different policy judgment

regarding the need for, and

appropriateness of, the Final Rules.

Consequently, we propose to rescind the

Final Rules in their entirety.

Several independent policy

judgments support a rescission of the

Final Rules. First, the Final Rules

deviate from the Commission’s ‘‘long-

standing commitment to a principles-

based, registrant-specific approach to

disclosure’’ that is ‘‘rooted in materiality

and facilitate[s] an understanding of a

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171

Modernization of Regulation S–K, Items 101,

103, and 105, Release No. 33–10825 (Aug. 26, 2020)

[85 FR 63726 (Oct. 8, 2020)] at 63727.

172

We note that, because the effectiveness of the

Final Rules has been stayed and the Final Rules

have never become effective, we do not expect that

the proposed rescission would implicate any

reasonable reliance interests that market

participants may have had in the operation of the

rules.

173

See discussion infra section IV.B.2.a.1; see

also discussion infra section IV.B.3.a and Adopting

Release at 21831.

174

Adopting Release at 21797–98 n.2068 and

accompanying text (explaining that although U.S.

GAAP and International Financial Reporting

Standards (‘‘IFRS’’) Accounting Standards do not

refer explicitly to climate-related matters,

registrants have an obligation to consider material

impacts when applying, for example, Financial

Accounting Standards Board (‘‘FASB’’) Accounting

Standards Codification (‘‘ASC’’) Topic 330

Inventory (IAS 2 Inventories) and FASB ASC Topic

360 Property, Plant, and Equipment (IAS 36

Impairment of Assets)).

175

15 U.S.C. 77k.

176

15 U.S.C. 77l.

177

See also 17 CFR 230.408 (in addition to the

information expressly required to be included in a

registration statement, there shall be added such

further material information, if any, as may be

necessary to make the required statements, in the

light of the circumstances under which they are

made, not misleading).

178

15 U.S.C. 78j(b).

179

See also 17 CFR 240.12b–20 (in addition to the

information expressly required to be included in a

statement or report, there shall be added such

further material information, if any, as may be

necessary to make the required statements, in the

light of the circumstances under which they are

made not misleading).

180

Adopting Release at 21679.

181

See, e.g., Adopting Release at 21810 (‘‘The

financial statement disclosures we are adopting

may involve estimation uncertainties that are

driven by the application of judgments and

assumptions’’) and 21734–35 (‘‘[T]he final rule will

require a registrant to describe the methodology,

significant inputs, and significant assumptions used

to calculate the registrant’s disclosed GHG

emissions . . . [and] will require a registrant to

disclose whether it calculated its GHG emissions

metrics using an approach pursuant to the GHG

Protocol’s Corporate Accounting and Reporting

Standard, an EPA regulation, an applicable ISO

standard, or another standard.’’).

182

See discussion infra section IV.C.2.a.3.

registrant’s business, financial condition

and prospects[.]’’

171

The Final Rules’

sharp departure from these important

tenets provides investors, at great cost,

with an avalanche of information that is

unlikely to be material to the decision-

making of a reasonable investor.

Second, the Final Rules require

registrants to provide costly and lengthy

disclosures about climate-related

matters, a divisive social and political

issue that is well outside the policy

concerns of the Federal securities laws.

In so doing, the Final Rules

inappropriately intrude on corporate

decision-making. Third, the Final Rules

impose substantial costs on public

companies and their shareholders that

are not justified by the informational

benefits they may provide to some

investors. Finally, imposing those same

high costs on registrants is at odds with

the Commission’s policy objectives of

facilitating capital formation and

promoting public company status.

As discussed more fully below, a

responsible approach to public

company disclosure demands that the

Final Rules be rescinded in their

entirety.

172

1. The Final Rules Are Unnecessary and

Inconsistent With a Registrant-Specific,

Materiality-Based Approach To

Disclosure That Best Serves the Interests

of Registrants and Investors

The Final Rules are unnecessary

because existing disclosure

requirements already elicit information

about the material effects of climate-

related matters. Furthermore, the Final

Rules prioritize one potential factor over

others that may materially affect a

registrant’s operations and financial

condition. Finally, recent events, such

as the European Union’s efforts to

narrow the coverage and scope of

recently adopted sustainability and due

diligence directives and extend their

implementation deadlines, have

highlighted the flaws in mandating such

highly prescriptive disclosure for an

evolving area, such as climate-related

matters, as in the Final Rules.

a. Existing Disclosure Obligations and

Anti-Fraud Provisions Already Elicit

Information About the Material Effects

of Climate-Related Matters

The Final Rules should be rescinded

because the Commission’s existing

disclosure requirements and anti-fraud

provisions already elicit information

about the effects of climate-related

matters in a way that is tailored to

reflect registrants’ particular

circumstances, is focused on material

information for investors, and does not

impose upon registrants the additional

costs and burdens of the Final Rules.

173

As the Commission highlighted in the

2010 Guidance, various disclosure

requirements apply to climate-related

matters when they are material to a

particular company. In particular, the

2010 Guidance highlighted Regulation

S–K items related to description of

business, legal proceedings, risk factors,

and management’s discussion and

analysis. The 2010 Guidance also noted

that registrants must consider any

financial statement implications in

accordance with applicable accounting

standards. As the Commission

acknowledged in the Adopting Release,

even prior to the adoption of the Final

Rules, registrants had an obligation to

consider material impacts on the

financial statements regardless of

whether a material impact was driven

by climate-related matters.

174

In addition to existing line item and

financial statement disclosure

requirements, the liability provisions of

the Federal securities laws, including

the anti-fraud provisions, serve to

protect investors from materially

misleading or incomplete disclosures

about climate-related matters. For

example, Sections 11

175

and 12

176

of

the Securities Act impose liability for

material misstatements or omissions

made in connection with registered

offerings conducted under the Securities

Act,

177

and Exchange Act Section

10(b)

178

and Rule 10b–5 broadly

prohibit fraudulent and deceptive

practices and untrue statements or

omissions of material facts in

connection with the purchase or sale of

any security.

179

We recognize that the Commission

previously stated that it adopted the

Final Rules because of a ‘‘need to

improve the consistency, comparability,

and reliability of climate-related

disclosures for investors.’’

180

We

disagree, however, that these purported

benefits justify adoption of the Final

Rules. As an initial matter, any

assertions about the benefits of the

consistency and comparability of the

disclosures elicited by the Final Rules

should be discounted because those

benefits are substantially compromised

by the inconsistent, variable, and often

speculative assumptions necessary to

make many of those disclosures.

181

As

a result, the type of information elicited

by the Final Rules would vary across

even similarly-situated registrants,

depending on, for instance, whether

they engage in certain practices, how

they choose to report certain

information, how they determine which

expenditures to include, what

methodologies they use, and how they

exercise judgment in assessing which

financial disclosures to make.

182

Moreover, as noted above, prior to

adoption of the Final Rules, registrants

were already required to disclose

information about the material effects of

climate-related matters in a manner

better tailored to reflect registrants’

particular circumstances. The benefits

of more tailored and effective disclosure

in this context justify any potential loss

in comparability because they allow for

more particularized insight into a

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183

17 CFR 229.1501(a).

184

17 CFR 229.1501(b).

185

17 CFR 229.1501(b)(1).

186

17 CFR 229.1502(a)(1).

187

17 CFR 229.1502(b).

188

17 CFR 210.14–02(b)(1).

189

17 CFR 210.14–02(b)(2).

190

This becomes evident when one considers

that, prior to the adoption of the Final Rules,

registrants already had an obligation to consider

material impacts on the financial statements,

including those that may be driven by climate-

related matters. See, e.g., 2010 Guidance at 6295

n.69 (stating that ‘‘registrants must also consider

any financial statement implications of climate

change issues in accordance with applicable

accounting standards, including [FASB] [ASC]

Topic 450, Contingencies, and FASB [ASC] Topic

275, Risks and Uncertainties’’).

191

Registrants face a litany of risks in their

operations. However, as the Commission has

previously stated, disclosure of risks should be

focused on the ‘‘most significant’’ or ‘‘principal’’

factors that make a registrant’s securities

speculative or risky. See Modernization of

Regulation S–K, Items 101, 103, and 105, Release

No. 33–10825 (Aug. 26, 2020) [85 FR 63726 (Oct.

8, 2020)].

192

While the Commission does require

specialized disclosure for certain types of offerings

and transaction structures and for particular

industries such as oil and gas, these requirements

are not focused on a specific type of risk, trend or

event and, unlike the Final Rules, do not require

virtually every registrant to devote time and

resources to determining whether it may have a

disclosure obligation under these regulations. See,

e.g., 17 CFR 229.901 through 229.915 (roll-up

transactions); 17 CFR 229.1601 through 229.1610

(special purpose acquisition companies); 17 CFR

229.1000 through 229.1016 (mergers and

acquisitions); 17 CFR 229.1201 through 229.1208

(registrants engaged in oil and gas producing

activities).

registrant’s management, operations and

financial condition, which can

contribute to better risk and return

assessments by investors. By contrast,

the Final Rules are more apt to create

information overload for investors,

including through disclosure of

immaterial information, while imposing

significant new costs for registrants.

In light of existing disclosure

obligations, the Final Rules serve

insufficient additional purpose in

informing investors about the material

effects of climate-related matters.

Indeed, in our view, the Final Rules are

likely to result in the disclosure of

immaterial information, at great cost to

investors.

b. The Final Rules Prioritize the Effects

of Climate-Related Matters Over Other

Factors That May Materially Affect a

Registrant’s Operations and Financial

Condition

In adopting the Final Rules, the

Commission departed from its existing,

generally principles-based approach to

disclosure that for decades has elicited

information about matters, including

climate-related matters, that materially

affect a registrant’s operations or

financial condition. In our view, a

disclosure regime that prioritizes a

single potential factor above any other

that may affect the registrant and

requires disclosure at the level of

granularity called for by the Final Rules

is inferior to the Commission’s existing

approach to disclosure that already

applies with equal force to climate-

related matters.

The Final Rules impose a myriad of

highly prescriptive regulations that

mandate granular disclosures focused

exclusively on climate-related matters.

For example, with respect to climate-

related risks only, registrants under the

Final Rules would need to consider and

possibly disclose: (i) how a registrant’s

board oversees and is informed of

climate risk, regardless of

materiality;

183

(ii) how a registrant’s

management assesses and manages

material climate risk;

184

(iii) which

management positions manage climate

risk and the associated expertise of the

individuals serving in those roles;

185

(iv) the geographic location of physical

climate risk;

186

and (v) how climate

risks affect items like a registrant’s

products or services, suppliers, climate

mitigation activities, and expenditures

for research and development.

187

Similarly, the financial statement

requirements prioritize the effects of

severe weather events and other natural

conditions by imposing relatively low

percentage thresholds for when such

effects must be separately reported in

the notes to the financial statements.

Specifically, the Final Rules require

disclosure in the income statement of

expenditures expensed as incurred and

losses if such amounts (in the aggregate)

equal or exceed one percent of the

absolute value of income or loss before

income tax expense or benefit (subject

to a $100,000 de minimis threshold)

188

and require disclosure of capitalized

costs and charges recognized on the

balance sheet if the absolute value of

such amounts (in the aggregate) equals

or exceeds one percent of the absolute

value of stockholders’ equity or deficit

(subject to a $500,000 de minimis

threshold).

189

These examples,

including the specified thresholds,

make clear that the Final Rules cannot

be justified as eliciting disclosure of

material information. Given their

exceedingly granular requirements, the

Final Rules would inevitably result in

the disclosure of immaterial information

about climate-related matters.

190

Requiring such granular disclosures

about a single type of risk, trend or

event is at odds with a disclosure

system that is intended to elicit

information about the most significant

factors affecting a registrant’s operations

and financial condition.

191

The

Commission’s disclosure regime

generally does not require this level of

detailed disclosure for other factors

affecting a registrant’s business.

192

Requiring such attention by registrants

on climate-related matters, specifically,

may lead to registrants devoting an

inappropriate amount of attention to

managing and reporting on such

matters, which may not be among the

most significant factors affecting the

registrant’s business. The Final Rules’

misplaced focus, however, is not limited

to impacts on a registrant’s allocation of

resources. The sheer volume of

disclosures responsive to the Final

Rules may hurt investors’ abilities to

ascertain relevant information about the

other factors affecting a registrant

because the climate-related disclosures

could overshadow material disclosures

about those other factors.

Moreover, as discussed in section

III.C.3, the Commission’s attempt to

mitigate the burdensome granularity of

the adopted requirements by adding

materiality qualifiers throughout the

Final Rules fails to adequately mitigate

their distorting effects on registrant

disclosures. Given the complexity of

making the materiality determinations

required by the Final Rules, many

registrants may err on the side of over-

disclosure, burdening both investors

and registrants with an avalanche of

climate-related information.

Thus, in our view, the Final Rules are

inconsistent with and inferior to the

Commission’s long-standing, registrant-

specific approach to disclosure of

factors materially affecting a registrant’s

operations and financial condition and

therefore should be rescinded.

c. Recent Developments Underscore

Why a Flexible, Materiality-Based

Approach Is Preferable

Recent efforts to scale back, set aside,

or otherwise revise various climate

reporting regimes at the international

level further underscore why the

Commission was misguided in adopting

costly and prescriptive requirements

built around shifting investor

preferences and reporting trends.

Investors are not monolithic and have

differing risk appetites, investment

strategies, and analytical methods—and

in some cases non-financial interests—

that affect their particular investment

decisions. In designing a disclosure

regime, the Commission should not seek

to cater to the specific informational

needs of every subset of investors about

each emergent topic. Rather, as the

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193

See Basic Inc. v. Levinson, 485 U.S. 224

(1988).

194

See supra section III.B.1.b.

195

As noted in the Adopting Release, the IFRS

Foundation formed the ISSB in November 2021,

and in June 2023, the ISSB issued General

Requirements for Disclosure of Sustainability-

related Financial Information and Climate-related

Disclosures (‘‘IFRS S2’’). Adopting Release at

21680. The Adopting Release also observed that

several jurisdictions, including Australia, Brazil,

Canada, Hong Kong, Japan, Malaysia, Nigeria,

Singapore, and the United Kingdom, had

announced plans to ‘‘adopt, apply, or otherwise be

informed by the ISSB standards.’’ Id.

196

Id.

197

See id. at 21681.

198

ISSB, Amendments to IFRS S2, IFRS

Sustainability Disclosure Standard, Amendments to

Greenhouse Gas Emissions Disclosures (Dec. 2025),

https://www.ifrs.org/content/dam/ifrs/publications/

amendments/english/2025/issb-2025-1-

amendments-ifrs-s2.pdf. This IFRS Sustainability

Disclosure Standard indicates that the climate-

related disclosure requirements were amended in

response to ‘‘challenges entities face in

implementing IFRS S2 when applying specific

greenhouse gas emissions disclosure requirements.’’

Id., paragraph BC80A.

199

See Directive (EU) 2026/470 (Feb. 24, 2026);

Directive (EU) 2025/794 (Apr. 14, 2025); European

Commission, Directorate-General for Financial

Stability, Financial Services and Capital Markets

Union, Omnibus Package, Newsletter (Apr. 1,

2026), available at https://finance.ec.europa.eu/

news/omnibus-package-2025-04-01_en; Council of

the European Union, Council Signs Off

Simplification of Sustainability Reporting and Due

Diligence Requirements to Boost EU

Competitiveness, Press Release (Feb. 24, 2026),

available at https://www.consilium.europa.eu/en/

press/press-releases/2026/02/24/council-signs-off-

simplification-of-sustainability-reporting-and-due-

diligence-requirements-to-boost-eu-

competitiveness/.

200

See supra note 199.

201

See supra section III.B.2 for further discussion

of how the Final Rules intrude on State control over

corporate governance by effectively regulating

issuers’ internal affairs.

202

See Adopting Release at 21859.

Supreme Court directed when

delineating a materiality standard for

the Federal securities laws,

193

the

Commission should look to whether the

reasonable investor would consider the

information important in buying or

selling securities—and as discussed

above, the common interests of

reasonable investors is in information

regarding the financial performance of a

company, the pricing of securities, and

the prospect for economic and financial

return from the disclosing company.

194

Moreover, investors generally are better

served by regulatory requirements that

can be adapted to registrants’ specific

circumstances. Such bespoke

disclosures are more likely to provide

material information than the one-size-

fits-all disclosure approach of the Final

Rules. If, over time, market forces lead

to coalescence around certain disclosure

practices, such practices are likely to be

more responsive to the changing needs

of investors than the top-down

prescriptive approach of the Final

Rules.

The soundness of these basic

principles is well illustrated by the

challenges faced by other climate-risk

reporting regimes since the Final Rules

were adopted. In adopting the Final

Rules, the Commission observed several

ongoing developments related to

climate-risk reporting, which included,

at the time, announcements by several

jurisdictions to adopt, apply, or

otherwise be informed by the

International Sustainability Standards

Board (‘‘ISSB’’) standards.

195

The

Adopting Release also highlighted the

European Union’s (‘‘EU’’) adoption of

the Corporate Sustainability Reporting

Directive (‘‘CSRD’’), which requires

certain large and listed companies and

other entities, including non-EU

entities, to report on sustainability-

related issues in line with the European

Sustainability Reporting Standards.

196

In taking note of such developments, the

Commission acknowledged that these

laws could reduce the compliance

burden of the Final Rules to the extent

they impose similar requirements on

registrants subject to them.

197

Since the adoption of the Final Rules

only two years ago, there has been a

noticeable effort to step back from these

initiatives, calling into question the

Commission’s decision to follow them

with its own highly prescriptive

approach. These developments also

undermine the assumption that the

emergence of other reporting regimes

would help to mitigate the significant

costs of the Final Rules. For example,

entities that set international standards

for climate-risk reporting regimes, such

as the ISSB and the EU, have revised

their climate-related disclosure

standards, having found them to be

burdensome, overly complex, and/or

duplicative. The ISSB has recently

amended IFRS to ‘‘reduce complexity,

the risk of duplicative reporting and the

cost of applying specific greenhouse gas

emissions disclosure requirements.’’

198

In February 2026, the EU adopted

legislation revising the CSRD and the

Corporate Sustainability Due Diligence

Directive (‘‘CSDDD’’) to simplify rules

on sustainable finance reporting and

decrease compliance burdens.

199

Specifically, the EU removed around

80% of previously covered companies

from the scope of the CSRD, narrowed

the scope of the CSDDD, and postponed

the implementation timelines of both

Directives, among other changes.

200

These developments reinforce our

determination that highly prescriptive

disclosure requirements based on

shifting investor preferences and

reporting trends are inferior to a

registrant-specific, materiality-based

reporting regime focused on the

information a reasonable investor would

consider important in making an

investment decision.

2. The Final Rules Stray Well Beyond

the Policy Concerns of the Federal

Securities Laws

An additional policy reason for

rescinding the Final Rules is that they

do not respond to a gap in investor

protection in the securities disclosure

regime; rather, they concern the divisive

and unsettled political and social issue

of climate regulation. The Commission’s

role is to protect investors; maintain

fair, orderly, and efficient markets; and

facilitate capital formation. It is not to

regulate how public companies manage

the effects of climate-related matters or

to hijack the public company reporting

regime to further social policies

unrelated to the aims of the Federal

securities laws. The Commission’s

disclosure requirements should inform

investors about a registrant’s operations

and finances; it is not the province of

the Commission to drive changes in

those operations absent specific

direction from Congress.

201

The Final

Rules, with their granular and highly

prescriptive requirements,

inappropriately put a thumb on the

scale with respect to registrants’

decisions about whether and how to

manage those effects. Indeed, under the

Final Rules, even registrants for which

the effects of climate-related matters

may have little to no direct relevance to

their particular facts and circumstances

must consider specific aspects of

climate-related matters on at least an

annual basis to determine whether they

are required to disclose anything. For

example, in order to comply with Item

1505, most, if not all, LAFs and AFs that

are not EGCs or SRCs will, to some

extent, need to adopt controls and

procedures to assess the materiality of

their Scope 1 and 2 emissions and

determine whether disclosure is

required if they do not already have

them in place.

202

Such conduct-altering

effects demonstrate that the Final Rules

are different in kind from existing

disclosure obligations and stray well

beyond what is required in order to

inform and protect the reasonable

investor.

Separate and apart from the question

of whether the Commission has legal

authority to promulgate the Final Rules

discussed in section III.B, as a policy

matter, the Commission does not view

disclosure rules focused solely on

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Environmental and Social Disclosure Release

at 51660; see supra section III.B.2.

204

Commissioner Hester Peirce dissented from

the adoption of the Final Rules, saying that they

promise ‘‘to spam investors with details about the

Commission’s pet topic of the day—climate.’’

Comm’r Hester M. Peirce, Green Regs and Spam:

Statement on the Enhancement and

Standardization of Climate-Related Disclosures for

Investors (Mar. 6, 2024), available at https://

www.sec.gov/newsroom/speeches-statements/

peirce-statement-mandatory-climate-risk-

disclosures-030624. Commissioner Mark Uyeda

made similar points, saying that the Final Rules are

‘‘climate regulation promulgated under the

Commission’s seal’’ and ‘‘the culmination of efforts

by various interests to hijack and use the Federal

securities laws for their climate-related goals.’’

Comm’r Mark T. Uyeda, A Climate Regulation

under the Commission’s Seal: Dissenting Statement

on The Enhancement and Standardization of

Climate-Related Disclosures for Investors (Mar. 6,

2024), available at https://www.sec.gov/newsroom/

speeches-statements/uyeda-statement-mandatory-

climate-risk-disclosures-030624.

205

Adopting Release at 21875.

206

See infra section IV.C.3.

207

Adopting Release at 21671.

208

See id. at 21678, n.113; see also id. at 21853

(‘‘Commenters noted that with the limitations to the

currently available climate-related disclosures,

extensive costs in the form of data gathering,

research and analysis are needed to process them

and to fill data gaps where possible in forming

investment decisions.’’ (citation omitted)).

209

Section IV.C.2.a. of the Adopting Release

identifies several benefits of the Final Rules, which

are discussed in more detail below.

210

Adopting Release at 21698 (explaining that the

Commission added an explicit materiality qualifier

to Item 1502(b) to help address concerns that the

proposed rule could be ‘‘unduly burdensome for

registrants’’). See id. at 21700–01 (stating that

subjecting Item 1502(d) to ‘‘materiality’’ would

‘‘help to mitigate the compliance burden’’).

211

17 CFR 229.1505(a)(1). As a tacit

acknowledgement of the difficulty of making

materiality determinations in the context of

emissions metrics, the Adopting Release provided

guidance and several detailed examples of when

GHG emissions could be considered ‘‘material.’’ See

Adopting Release at 21733.

212

See Adopting Release at 21875.

213

Id. at 21733.

climate-related matters as an

appropriate exercise of agency

rulemaking authority. The Commission

has no interest in pushing the limits of

its regulatory authority. Whether and to

what extent companies should be

generally required to disclose intrusive

climate-related information is a matter

of significant political and practical

importance. Absent a clear statutory

directive to the contrary, those matters

belong to the People’s elected

representatives, not agency officials, to

decide.

As discussed above, more than fifty

years ago, the Commission stated that it

does not have discretion under the

Securities Act or the Exchange Act to

require disclosure for the sole purpose

of promoting social goals unrelated to

those underlying these Acts.

203

We

agree with the sentiments in the

Commission’s 1975 statement and with

the dissenting views expressed at the

time of the Adopting Release by

Commissioners Hester M. Peirce and

Mark T. Uyeda.

204

The Final Rules stray

well beyond the policy concerns of the

Federal securities laws and should be

rescinded in their entirety.

3. The Final Rules Impose Significant

Costs on Public Companies and Their

Shareholders That Are Not Justified by

the Informational Benefits They Provide

to Some Investors

The significant costs of the Final

Rules provide a separate, compelling

reason to rescind them in their entirety.

In imposing new disclosure obligations,

the Commission should assess whether

the benefits of the information required

to be disclosed—considered from the

perspective of the reasonable investor—

justify the costs of providing the

disclosure. The Final Rules fall well

short of this standard. By eliminating

the costly disclosure requirements in

the Final Rules, the proposed rescission

would broadly benefit market efficiency,

competition, and capital formation.

By the Commission’s own estimation,

the Final Rules will significantly

increase the costs associated with public

company disclosures. Indeed, the

Commission estimated that depending

on the registrant, annual compliance

costs (averaged over the first ten years

of compliance) could range from less

than $197,000 to over $739,000.

205

Updating these figures for inflation and

aggregating them across all affected

registrants, we estimate that rescinding

the Final Rules could generate

annualized savings of about $4.9 billion

per year over the next 10 years for all

affected registrants.

206

In the Adopting Release, the

Commission acknowledged the

significant additional burdens that the

Final Rules will impose on registrants

but nonetheless asserted that ‘‘those

burdens are justified by the

informational benefits of the disclosures

to investors.’’

207

We disagree with the

Commission’s determination that such a

significant imposition of costs is

warranted in order to increase the

disclosures across registrants about a

single type of risk that some registrants

may face. This conclusion is bolstered

by the fact that, to the extent this risk

is material, information about that risk

should be elicited by existing disclosure

requirements, as discussed in section

III.C.1.a. Thus, any marginal or

theoretical informational benefits to be

derived from the Final Rules do not and

cannot justify the substantial burdens

they impose on public companies and

their shareholders.

We recognize that some commenters

to the Proposing Release indicated that

investors have faced and may continue

to face costs associated with obtaining

or verifying information related to a

registrant’s climate-related risks or

management thereof.

208

However, we do

not agree that it is appropriate to burden

all shareholders of almost all public

companies with the high costs of the

Final Rules in order to subsidize the

informational demands of certain

investors who choose to focus their

investment strategies on climate-related

matters or who have interests other than

the pursuit of a financial return that are

driving their informational demands.

There are multitudes of investment

strategies, and investors bear all sorts of

costs to search for and verify

information based on their chosen

strategy. They should be free to do so.

Similarly, individual registrants may

want to attract climate-focused investors

and choose to provide additional

information. They should be free to do

so as well. But the entire market should

not be forced to bear the costs of

providing more particularized

information than what the reasonable

investor needs for an investment

decision. Market-based solutions to

demands for particular information are

more appropriate. Therefore,

notwithstanding that some investors

will not receive some of the

informational benefits described in the

Adopting Release,

209

we have

determined that the proposed rescission

is the appropriate course of action for a

disclosure regime focused on providing

material information to reasonable

investors.

Furthermore, despite the

Commission’s repeated assertions in the

Adopting Release, the layering of

materiality qualifiers throughout the

Final Rules fails to adequately mitigate

the overall burdens imposed on

registrants in the context of the Final

Rules’ highly prescriptive disclosure

requirements.

210

For example, the Final

Rules require certain registrants to

disclose Scope 1 and Scope 2 GHG

emissions, if material.

211

The Adopting

Release estimated that the compliance

costs to a registrant for these disclosures

would be $151,000 in the first year of

compliance and $67,000 annually in

subsequent years.

212

Moreover, as the

Adopting Release acknowledges, the

costs of assessing and monitoring the

materiality of a registrant’s emission

‘‘could be significant’’ even in situations

where the registrant ultimately

determines that they do not need to

provide disclosure.

213

The Adopting

Release did not separately quantify

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Id. at 21875 (‘‘While commenters provided

estimates of the overall costs of measuring and

assessing GHG emissions and making disclosure

under [the Task Force on Climate-Related

Disclosures (‘‘TCFD’’)] disclosure frameworks, they

did not provide a level of detail that would enable

us to reliably disaggregate the materiality

determination from the costs of disclosure more

broadly.’’).

215

Id. (‘‘While [the Commission has] not

provided a standalone cost estimate of making such

materiality determinations, [the Commission’s]

estimates of the costs of governance disclosure,

disclosure regarding the impacts of climate-related

risks on strategy, business model, and outlook, and

risk management disclosure begin with TCFD

disclosure as a starting point. Thus, to the extent

that a materiality or similar assessment is included

in the TCFD disclosure, this cost is reflected in the

Commission’s compliance cost estimates with

respect to [these] disclosure items.’’ (citation

omitted).

216

Id. at 21733–21734. In either scenario, a

registrant must first assume the burden of

calculating its Scope 1 and 2 emissions in order to

determine whether such emissions fit within the

Commission’s vague notion of materiality in this

context, or are ‘‘reasonably likely,’’ to be material

at some future date. Id.

217

See 17 CFR 229.1504(a).

218

Adopting Release at 21723.

219

See 17 CFR 229.1502(a).

220

See 17 CFR 229.1502(e)(1).

221

TSC Indus., Inc. v. Northway, Inc., 426 U.S.

438, 448–49 (1976).

222

See Adopting Release, section IV.C.1.a; id. at

21849.

these particular costs, which would

arise from the efforts of a registrant to

measure its Scope 1 and Scope 2

emissions, including establishing

organizational boundaries and

operational boundaries and adopting a

specific reporting protocol or

standard.

214

Only then, after it has

invested potentially significant

resources to perform this exercise, can

a registrant make a determination about

whether such metrics are material.

215

Thus, the Final Rules also require a

complicated analysis even to determine

whether disclosure is required,

216

saddling every covered registrant with

the costs of collecting the necessary

information and calculating emissions.

The difficulty of making materiality

determinations under the Final Rules is

further compounded by the complex

and overlapping nature of the required

disclosures. For example, the Final

Rules would require registrants to

disclose any climate-related target or

goal if such target or goal has materially

affected or is reasonably likely to

materially affect the registrant’s

business, results of operations, or

financial condition.

217

The Commission

asserted that investors ‘‘need detailed

information about a registrant’s climate-

related targets or goals in order to

understand and assess the registrant’s

transition risk strategy and how the

registrant is managing the material

impacts of its identified climate-related

risks.’’

218

The Commission adopted this

requirement notwithstanding the fact

that, elsewhere in the Final Rules, a

registrant is required to describe any

climate-related risks that have

materially impacted or are reasonably

likely to have a material impact on the

registrant, including on its strategy,

results of operations, or financial

condition.

219

In addition, if a registrant

has adopted a transition plan to manage

a material transition risk, it must

describe the plan and update its annual

report disclosure about the transition

plan each fiscal year by describing any

actions taken during the year under the

plan.

220

The use of materiality qualifiers

in such a complex, interconnected, and

highly prescriptive set of disclosure

requirements does not adequately

mitigate the overall burdens of

producing those disclosures.

Because the error cost of

miscalculating a disclosure obligation

includes a potential enforcement action

by the Commission or a securities fraud

class action, registrants are left with the

difficult choice of either making their

best judgments about materiality and

risking being subject to liability for

coming to the wrong conclusion or

disclosing information that may not be

material in an effort to avoid liability.

Investors do not benefit if

‘‘management’s fear of exposing itself to

substantial liability may cause it simply

to bury the shareholders in an avalanche

of trivial information—a result that is

hardly conducive to informed

decisionmaking.’’

221

As these examples show, the

Commission’s use of materiality

qualifiers does not adequately mitigate

the burdens of the climate-related

disclosure requirements. Moreover, in

the context of the complex and

overlapping nature of the Final Rules’

disclosure obligations, such materiality

qualifiers do not meaningfully limit the

information that a registrant feels

compelled to disclose, burying investors

in disclosures of limited value. Indeed,

the numerous materiality

determinations required by the Final

Rules merely mask how the rules

reached well beyond what a reasonable

investor would consider important in

buying or selling securities.

We similarly disagree that the

informational benefits of the Final Rules

justify the significant costs they would

impose. The Adopting Release asserts

several benefits of the Final Rules, such

as: (1) that the information will enable

investors to better assess material risks

in climate-related reporting and

facilitate comparisons across firms and

over time; (2) the information is relevant

to ensuring that the risk is correctly

priced into the securities; (3) the use of

a standardized disclosure framework

will ‘‘mitigate agency problems arising

from registrants being able to selectively

disclose . . . information, which

reduces transparency and impairs

investors’ ability to effectively assess the

potential financial impacts of a

registrant’s climate-related risks’’; and

(4) providing ‘‘better information’’ will

reduce information asymmetries

between managers and investors as well

as amongst investors, which ‘‘will

improve liquidity and reduce

transaction costs for investors ...,

and may lower firms’ cost of

capital.’’

222

Although we acknowledge

that the Commission may consider these

kinds of benefits when adopting new

disclosure rules, we disagree that these

policy goals should be pursued at such

significant costs.

As discussed in section III.B.2, any

assertions about the benefits of the

consistency and comparability of the

disclosures elicited by the Final Rules

should be discounted because those

benefits are substantially compromised

by the inconsistent, variable, and often

speculative assumptions necessary to

make many of those disclosures. Also, it

is far from clear that these

‘‘standardized’’ disclosures would serve

the informational needs of investors and

the marketplace better than existing

principles-based requirements that

allow for more particularized insight

into a registrant’s management,

operations, and financial condition.

In crafting a fit-for-purpose disclosure

regime, the Commission should

consider not only the informational

benefits to be derived from the required

disclosures but also the costs to produce

those disclosures, which are ultimately

borne by investors themselves. In doing

so, the Commission should take into

account whether the required

disclosures benefit existing and

potential investors in most companies,

or only those with particularized

investment strategies or informational

needs. In our evaluation, as we assess

these factors, any informational benefits

to be derived from the Final Rules

cannot justify the significant costs they

would impose on public companies and

their shareholders.

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223

See, e.g., Chairman Paul S. Atkins,

Revitalizing America’s Markets at 250 (Dec. 2,

2025), available at https://www.sec.gov/newsroom/

speeches-statements/atkins-120225-revitalizing-

americas-markets-250; Chairman Paul S. Atkins,

Statement on Reforming Regulation S–K (Jan. 13,

2026), available at https://www.sec.gov/newsroom/

speeches-statements/atkins-statement-reforming-

regulation-s-k-011326. We also note that facilitating

capital formation is one of the three prongs of the

Commission’s tripartite mission and a factor that

the Commission must consider when making public

interest determinations in the context of

rulemaking. See supra note 49 and accompanying

text.

224

See U.S. Securities and Exchange Commission

Staff, SEC Statistics & Data Visualizations:

Reporting Issuers, Number of Reporting Issuers by

Calendar Year (2004–2024) (last updated Aug. 12,

2025), available at https://www.sec.gov/data-

research/statistics-data-visualizations/reporting-

issuers/number-reporting-issuers-calendar-year-

2004-2024 (indicating that the number of reporting

issuers has decreased from 9,656 in 2004 to 7,902

in 2024, which represents an approximately 18.2%

decline); EY, The Declining Number of Public

Companies and Mandatory Reporting Requirements

(June 2022), available at https://accf.org/wp-

content/uploads/2022/06/EY-ACCF-The-declining-

number-of-public-companies-and-mandatory-

reporting-requirements-June-2022.pdf (considering

the 2000–2019 period and estimating that ‘‘[t]here

were at least 800 fewer US companies traded on

major US exchanges at the end of 2019 because of

mandatory reporting requirements.’’).

225

See, e.g., Michael Dambra, Laura Casares Field

& Matthew Gustafson, The JOBS Act and IPO

Volume: Evidence that Disclosure Costs Affect the

IPO Decision, 116 J. Fin. Econ. 121 (2015), which

suggests regulatory burden is an important

consideration in the going-public decision.

226

See 15 U.S.C. 77b(b); 17 U.S.C. 78c(f).

227

See 17 U.S.C. 78w(a)(2).

4. The High Costs of the Final Rules Are

at Odds With the Commission’s Policy

Objectives of Facilitating Capital

Formation and Promoting Public

Company Status

The Commission’s current agenda is

focused on restoring the vigor of public

securities markets and encouraging

companies to go public and stay

public.

223

The number of public

companies has diminished significantly

since 2000,

224

with some observers

pointing to the cost of public company

disclosure as one deterrent.

225

As discussed in section III.C.3, the

Final Rules add substantially to the cost

and complexity of public disclosures by

issuing and reporting companies. If the

Final Rules were to go into effect, they

would be in direct contravention of the

Commission’s current policy objectives

of promoting public company status and

facilitating capital formation.

The Final Rules increase the overall

costs associated with accessing and

participating in capital markets. This

increase in costs has a deterrent effect

on such participation, thereby reducing

market liquidity and depth, which

ultimately hinders, rather than

facilitates, capital formation. Costly

regulation can also divert registrants’

resources that could otherwise be spent

on production, investment, or

innovation. In addition, it can reduce

the incentives of registrants to

implement otherwise efficient business

strategies, transition plans, or goals

because of direct and indirect costs of

disclosing them. Such disclosure

requirements may disproportionately

affect smaller firms with resource

constraints and limit their ability to

grow and compete.

Regulatory costs can also influence

the size of the public markets, if

companies decide to exit the markets or

remain privately held to avoid

regulatory costs. This avoidance strategy

widens the transparency gap between

public and private companies,

negatively affecting competition

between public and private companies

as well as capital markets’ information

efficiency. Depending on market

conditions and other factors, registrants

may also pass on their compliance costs

to third parties, such as consumers and

workers. Beyond the desire to avoid

direct compliance costs, some

companies may avoid going public if

they fear they will have to provide

disclosure about an array of socially and

politically contentious issues. Such

effects, taken together, reduce overall

productivity, constrain growth

opportunities, and depress economic

efficiency, thus reducing future cash

flows, earnings expectations, and

shareholder returns.

The high costs imposed by the Final

Rules and related adverse effects

undermine the Commission’s goals of

facilitating capital formation and

improving the accessibility and

attractiveness of public company status.

The Commission declines to impose

such burdens on registrants and

therefore proposes to rescind the Final

Rules in their entirety.

Request for Comment

(1) Should we rescind the Final Rules

in their entirety as proposed? Why or

why not?

(2) Are there aspects of the Final

Rules that remain within the

Commission’s statutory authority and

should be retained? If so, how would

these items of disclosure be able to

operate sensibly without the rescinded

portions of the Final Rules?

(3) Are there alternatives to outright

rescission that we should consider? For

example, should we amend the Final

Rules so that they apply to a smaller

subset of registrants or in more limited

circumstances? Alternatively, should we

propose to replace the Final Rules with

less prescriptive and less costly

disclosures about climate-related

matters? If so, how would such

disclosures improve upon the

information already elicited by existing

disclosure obligations? What

information about climate-related

matters does a reasonable investor need

to make informed investment decisions?

(4) Does the proposed rescission

negatively affect any reasonable reliance

interests that market participants may

have had in the operation of the Final

Rules, notwithstanding that the rules

were stayed prior to effectiveness? Have

any costs been incurred in preparing to

comply with the Final Rules, even

though the Final Rules have been

stayed? If so, please explain why and

describe the type and magnitude of

those costs.

(5) Do existing disclosure

requirements serve to elicit adequate

disclosure about climate-related matters,

when material to a specific registrant?

Why or why not? Should we revise the

2010 Guidance to provide updated

guidance about how existing disclosure

obligations may elicit information about

climate-related matters?

(6) Have recent developments in

climate reporting practices affected the

rationale for the Final Rules? If so, how?

(7) If the Final Rules were to go into

effect, to what extent would they impact

firm decisions about whether to become

or remain a public company?

IV. Economic Analysis

A. Introduction

We are mindful of the costs imposed

by, and the benefits obtained from, our

rules. Securities Act section 2(b) and

Exchange Act section 3(f) require us,

when engaging in rulemaking where the

Commission is required to consider or

determine whether an action is

necessary or appropriate in the public

interest, to consider, in addition to the

protection of investors, whether the

action will promote efficiency,

competition, and capital formation.

226

In addition, Exchange Act section

23(a)(2) requires the Commission to

consider the effects on competition of

any rules that the Commission adopts

under the Exchange Act and prohibits

the Commission from adopting any rule

that would impose a burden on

competition not necessary or

appropriate in furtherance of the

purposes of the Exchange Act.

227

We are

likewise sensitive to the economic

effects of rescinding our existing rules,

which may involve the reconsideration

of the benefits, costs, and impacts on

efficiency, competition, and capital

formation that were assessed when

adopting those rules.

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228

See, e.g., Nasdaq Stock Mkt. LLC v. SEC, 34

F.4th 1105, 1111–14 (D.C. Cir. 2022). This approach

also follows SEC staff guidance on economic

analysis for rulemaking. See SEC Staff, Current

Guidance on Economic Analysis in SEC

Rulemakings (Mar. 16, 2012), available at https://

www.sec.gov/divisions/riskfin/rsfi_guidance_econ_

analy_secrulemaking.pdf (‘‘The economic

consequences of proposed rules (potential costs and

benefits including effects on efficiency,

competition, and capital formation) should be

measured against a baseline, which is the best

assessment of how the world would look in the

absence of the proposed action.’’); id. at 7 (‘‘The

baseline includes both the economic attributes of

the relevant market and the existing regulatory

structure’’).

229

See Adopting Release, section IV.A.1

230

See Adopting Release, at 21683 n.172. Such

purposes could include promoting particular

conceptions of acceptable corporate behavior,

compelling corporations and officials to regularly

speak on climate-related issues, or initiating

progressively broader or more frequent disclosure

demands that could significantly increase the

burden of making disclosures. See, e.g., Hans B.

Christensen, Luzi Hail & Christian Leuz, Mandatory

CSR and Sustainability Reporting: Economic

Analysis and Literature Review, 26 Rev. Acct. Stud.

1176 (2021).

231

The number of domestic registrants and

foreign private issuers that would be affected by the

Final Rules, if they go into effect, is estimated as

the number of companies, identified by Central

Index Key (‘‘CIK’’), that filed a unique Form 10–K,

Form 10–KT, Form 20–F, or amendments to these

forms, during calendar year 2025, excluding asset-

backed securities issuers. The estimates for SRCs,

EGCs, AFs, LAFs, and NAFs are based on data

obtained by Commission staff using a computer

program that analyzes Commission XBRL filings

and manual review of filings by Commission staff.

232

There were 15 issuers with filer status missing

among Form 10–K filers and one issuer with filer

status missing among Form 20–F filers in 2025.

These registrants are not included into the total

registrants count.

233

This estimate was calculated by searching

EDGAR for all registrants who filed a Form S–1 or

F–1 in the year 2025. If multiple registration

statements were filed in 2025 by the same

registrant, the earliest was used. This list of

registrants was then compared to a list of periodic

reports (Forms 10–K, 10–Q, 20–F, and 8–K) filed on

EDGAR since 2018. Approximately 810 registrants

filed registration statements in 2025 that had not

previously filed a Form 10–K, 10–Q, 20–F, or 8–K.

Of those, approximately 340 did not subsequently

file a Form 10–K, 10–Q, 20–F, or 8–K in 2025 or

in the first calendar quarter of 2026, for example by

operation of 17 CFR 240.12h–5 or 12h–7, indicating

Continued

We are proposing to rescind the Final

Rules in their entirety for the reasons

articulated in section III. The proposed

rescission would significantly reduce

regulatory compliance costs for

registrants affected by the Final Rules.

We consider below the potential

benefits and costs of the proposed

rescission and the likely effects of

rescission on efficiency, competition,

and capital formation. Many of the

benefits and costs are impracticable to

quantify or estimate with any degree of

certainty. Where we are unable to

quantify the economic effects of the

proposed rescission, we provide a

qualitative assessment of the potential

effects and encourage commenters to

provide data and information that

would help quantify the benefits and

costs of the proposed rescission, and the

potential impacts of the proposed

rescission on efficiency, competition,

and capital formation.

B. Economic Baseline

The baseline against which the

benefits and costs and the effects on

efficiency, competition, and capital

formation of the proposed rescission are

measured consists of current

requirements for climate-related

disclosures and current market practices

that relate to such disclosures.

228

For

purposes of defining the baseline for

this Economic Analysis, we treat the

Final Rules as if they are in effect even

though the Commission has stayed their

implementation. Below we describe the

parties who are likely to be affected by

the Final Rules and therefore the

proposed rescission, as well as existing

rules or laws that require or elicit

climate-related disclosures and the

current market practice related to

reporting on climate-related matters.

1. Affected Parties

The proposed rescission of the Final

Rules would apply to registrants filing

Securities Act and Exchange Act

registration statements as well as

Exchange Act annual and quarterly

reports. The Adopting Release identifies

several parties likely to be affected by

the Final Rules, and they would be the

same parties affected by a rescission of

the Final Rules. The parties likely to be

affected are: registrants subject to the

disclosure requirements imposed by the

Final Rules, as detailed below; users of

information about climate-related

matters, such as investors, analysts, and

other market participants; and third-

party service providers who may collect,

review, and process this information,

including assurance providers and

ratings providers.

229

In particular, the Final Rules require

both domestic registrants and foreign

private issuers affected by the Final

Rules to disclose highly granular

information on climate-related matters

in a standardized and centralized format

in Commission filings. The affected

parties that directly benefit from the

Final Rules include specific subgroups:

those investors who would use this

information as part of their particular

investment strategies; financial

intermediaries who act on behalf of

investors (e.g., asset managers,

investment advisers, pension fund

managers) to the extent they incorporate

climate-related risks when constructing

investment portfolios and evaluating

registrants’ risk profiles; and

stakeholders who would use the

expanded climate disclosures for

advocacy or political purposes.

230

The

affected parties that incur direct costs

from the Final Rules include all

aforementioned registrants and by

extension their shareholders—broadly

speaking all investors in these

registrants, which is a class of investors

broader than the subgroup of investors

directly benefiting from the Final Rules.

The Final Rules affect both domestic

registrants and foreign private issuers

filing registration statements and

periodic reports with the Commission,

but they would not apply to Canadian

registrants that use the

Multijurisdictional Disclosure System

and file their Exchange Act registration

statements and annual reports on Form

40–F.

231

We estimate that during

calendar year 2025, excluding asset-

backed securities issuers, there were

6,766 registrants that filed on domestic

forms and on Form 20–F.

232

We also

estimate that 2,348 of these registrants

were LAFs, 541 were AFs that are not

SRCs or EGCs (non-exempt AFs) and

3,877 were all other registrants (AFs that

were SRCs or EGCs, and non-accelerated

filers (‘‘NAFs’’)).

Out of these registrants, there were

approximately 5,703 registrants that

filed on domestic forms, and

approximately 1,063 foreign private

issuers that filed on Form 20–F. Among

registrants that filed on domestic forms,

approximately 36 percent were LAFs, 7

percent were non-exempt AFs, and 56

percent were AFs that were SRCs or

EGCs, and NAFs. In addition, we

estimate that among the foreign private

issuers that filed on Form 20–F

approximately 27 percent were LAFs, 11

percent were non-exempt AFs, and 62

percent were AFs that were SRCs or

EGCs, and NAFs.

The Final Rules would also require

disclosures in registered offerings,

except with respect to business

combination transactions involving a

company not subject to the reporting

requirements of section 13(a) or 15(d) of

the Exchange Act. In many cases,

registrants would be able to meet these

requirements by incorporating by

reference from their periodic reports.

Registrants that have not previously

filed periodic reports, such as

companies conducting initial public

offerings, would not have previously

filed such reports to incorporate by

reference. In 2025, there were

approximately 810 such companies that

conducted registered offerings on Form

S–1 or F–1.

233

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that they may incur lower or zero cost of ongoing

compliance because they are exempt from ongoing

Exchange Act reporting obligations.

234

See supra section III.C.1.a for discussion of

how existing disclosure obligations already elicit

disclosure of material climate-related matters. The

Commission considers the current disclosure of

climate-related matters as part of the baseline

against which the benefits and costs of the proposed

rescission are measured.

235

For example, the 2010 Guidance discusses

disclosure obligations under 17 CFR 229.101, 17

CFR 229.103, and 17 CFR 229.303. For an overview

of how climate change matters may be required to

be disclosed under existing rules, primarily

Regulation S–K and Regulation S–X, see 2010

Guidance, section III.

236

17 CFR 229.101(c)(2)(i) (for non-SRCs),

(h)(4)(xi) (for SRCs). Item 101 of Regulation S–K

was amended in 2020. When the 2010 Guidance

was issued, Item 101(c)(1)(xii) required disclosure

of the material effects of compliance with

environmental laws, and thereafter, in 2020, the

item was amended to reference the material effects

of compliance with all material government

regulations, not just environmental laws. See

Modernization of Regulation S–K, Items 101, 103,

and 105, Release No. 33–10825 (Aug. 26, 2020) [85

FR 63726 (Oct. 8, 2020)].

237

17 CFR 229.105. Risk factors disclosure was

addressed in Item 503(c) of Regulation S–K at the

time of the 2010 Guidance. See 17 CFR 229.503(c)

(2009). This rule provision was revised and

relocated to Item 105 of Regulation S–K in 2019.

See FAST Act Modernization and Simplification of

Regulation S–K, Release No. 33–10618 (Mar. 20,

2019) [84 FR 12674 (Apr. 2, 2019)].

238

17 CFR 229.303. The 2010 Guidance also

discusses corollary provisions applicable to foreign

private issuers not filing on domestic forms. The

2010 Guidance further states that, in addition to the

Regulation S–K items discussed therein, registrants

must also consider any financial statement

implications of climate-related matters in

accordance with applicable accounting standards,

including FASB ASC Topic 450, Contingencies, and

FASB ASC Topic 275, Risks and Uncertainties.

Finally, the 2010 Guidance notes the applicability

of Securities Act Rule 408 and Exchange Act Rule

12b–20, which require a registrant to disclose, in

addition to the information expressly required to be

included in a statement or report, ‘‘such further

material information, if any, as may be necessary to

make the required statements, in light of the

circumstances under which they are made, not

misleading.’’ 17 CFR 230.408(a); 17 CFR 240.12b–

20.

239

See supra section II for a discussion of the

requirements of the Final Rules.

240

Id.

241

See Enhancement of Emerging Growth

Company Accommodations and Simplification of

Filer Status for Reporting Companies, Release No.

33–11419 (May 19, 2026) [91 FR 30086 (May 21,

2026)] (‘‘Filer Status Proposing Release’’).

242

See Adopting Release, section IV.A.3; see also

Nat’l Ass’n of Ins. Comm’rs (‘‘NAIC’’), Redesigned

State Climate Risk Disclosure Survey (adopted Apr.

6, 2022), available at https://www.insurance.ca.gov/

0250-insurers/0300-insurers/0100-applications/

ClimateSurvey/upload/2022RevisedStateClimate

RiskSurvey.pdf (describing the scope and intent of

the climate risk disclosure survey and providing

guidance on the applicability of the survey). As of

2024, 24 States and the District of Columbia require

these domestic insurers to disclose their climate-

related risk assessment and strategy via the NAIC

Climate Risk Disclosure Survey. The 24 States are

Arizona, California, Colorado, Connecticut,

Delaware, Hawaii, Illinois, Maine, Maryland,

Massachusetts, Michigan, Minnesota, Nevada, New

Hampshire, New Jersey, New Mexico, New York,

Oregon, Pennsylvania, Rhode Island, Vermont,

Virginia, Washington and Wisconsin. Cal. Dep’t of

Ins., NAIC Climate Risk Disclosure Survey

Results—Home, available at https://interactive.web.

insurance.ca.gov/apex_extprd/f?p=201:1 (last

visited April 6, 2026).

243

This estimate is based on Form 20–F and Form

10–K filings in calendar year 2023 and 2023 NAIC

survey results. Cal. Dep’t of Ins., Climate Risk

Disclosure Survey Database, available at https://

interactive.web.insurance.ca.gov/apex_extprd/

f?p=201:1 (last visited March. 13, 2026).

244

See Adopting Release, section IV.A.3. for a

discussion of Federal and State GHG reporting

programs that were in existence at the time of the

adoption of the Final Rules.

245

See 40 CFR part 98.

2. Current Regulatory Framework

a. Commission Disclosure Requirements

1. 2010 Guidance and Existing Rules

Apart from the Final Rules, existing

Commission disclosure requirements

may, depending on the circumstances,

require or elicit disclosure of certain

climate-related matters.

234

The 2010

Guidance emphasizes that certain

existing disclosure requirements in

Regulation S–K and Regulation S–X

may require disclosure about climate-

related matters.

235

With respect to the

most pertinent non-financial statement

disclosure rules, we note that: Item 101

of Regulation S–K (Description of

business) expressly requires disclosure

regarding certain material costs and

effects of compliance with

environmental regulations;

236

Item 103

of Regulation S–K (Legal proceedings)

requires disclosure regarding any

material pending legal proceeding to

which a registrant or any of its

subsidiaries is a party or of which any

of their property is the subject; Item 105

of Regulation S–K (Risk factors)

requires, where appropriate, a

discussion of the material factors that

make an investment in a registrant or an

offering speculative or risky;

237

and

Item 303 of Regulation S–K

(management’s discussion and analysis

of financial condition and results of

operation) requires material historical

and prospective narrative disclosure to

help investors assess the financial

condition and results of operations of a

registrant.

238

Registrants are currently

required to provide disclosure about

climate-related matters to the extent

they are responsive to existing

disclosure requirements, such as those

highlighted in the 2010 Guidance.

2. The Final Rules

In March 2024, the Commission

adopted the Final Rules. The Final

Rules require registrants to disclose

certain climate-related information in

their registration statements and annual

reports.

239

Among other things, the

Final Rules require public companies to

disclose detailed information about the

impact and management of climate-

related risks, GHG emissions, scenario

analysis, internal carbon prices and

certain climate-related financial

statement effects.

240

As discussed in

section II, the Final Rules have not gone

into effect.

3. Recently Proposed Rules

The Commission recently proposed

amendments to streamline filer statuses

for Exchange Act reporting companies

into two primary categories: LAFs and

NAFs.

241

The proposed amendments

would, among other things, raise the

public float threshold and seasoning

requirements for qualification as a LAF

and extend certain existing

accommodations and scaled disclosures

currently reserved for SRCs, EGCs and/

or NAFs to all NAFs under the proposed

amendments, while continuing to

require compliance with non-scaled

disclosure from LAFs. Because the Final

Rules also scaled disclosures based on

filer status, if adopted, the proposed

amendments in the Filer Status

Proposing Release would affect which

companies are subject to which

requirements under the Final Rules.

b. Existing State and Other Federal Laws

Existing State and other Federal laws

require certain climate-related

disclosures and reporting. As a result of

these reporting requirements, some

registrants subject to the Final Rules

may already be disclosing certain

information about climate-related

matters or may be developing processes

and systems to track and disclose such

matters.

For instance, within the insurance

industry, there are requirements for

mandatory climate risk disclosures for

any domestic insurers that write more

than $100 million in annual net written

premium.

242

For reporting year 2023,

1,700 companies provided climate risk

disclosures in response to the NAIC

survey.

243

Federal and State reporting

requirements related to GHG emissions

also exist.

244

Since the adoption of the

Final Rules, officials have proposed

amendments to eliminate or reduce the

climate-related disclosure obligations of

some of these programs, or these

disclosure obligations have been

challenged in courts. Notably, at the

Federal level, with respect to the

Greenhouse Gas Reporting Program,

which requires that each facility that

directly emits more than 25,000 metric

tons of CO

2

e per year to report its direct

emissions to the EPA,

245

the EPA

proposed amendments in September

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246

See EPA, Reconsideration of the Greenhouse

Gas Reporting Rule [90 FR 44591 (Sept. 16, 2025)];

see also EPA, EPA Releases Proposal to End the

Burdensome, Costly Greenhouse Gas Reporting

Program, Saving up to $2.4 Billion (Sept. 12, 2025),

available at https://www.epa.gov/newsreleases/epa-

releases-proposal-end-burdensome-costly-

greenhouse-gas-reporting-program-saving-24

(overview of proposed amendments).

247

Id.

248

See Adopting Release at 21681.

249

See Order, U.S. Chamber of Com. v. Randolph,

No. 25–5327, 2025 U.S. App. LEXIS 32205 (9th Cir.

Nov. 18, 2025).

250

The draft regulations for Senate Bill 253

indicate that the reporting deadline of Aug. 10,

2026, remains unchanged for reporting Scope 1 and

Scope 2 emissions. See Cal. Air Res. Bd., Article 6:

California Climate Disclosures (Dec. 2025),

available at https://ww2.arb.ca.gov/sites/default/

files/barcu/regact/2025/sb253-261/reg%20text.pdf.

251

See SB–253, Climate Corporate Data

Accountability Act, 2023–2024 Senate, Reg. Sess.

(Cal. 2023), available at https://leginfo.legislature.

ca.gov/faces/billNavClient.xhtml?bill_

id=202320240SB253.

252

See supra note 249; see also Lisa Rushton,

Womble Bond Dickinson (US) LLP, California’s

Climate Risk Disclosure Law Paused. What SB 261’s

Injunction Means for Businesses (Dec. 9, 2025),

available at https://natlawreview.com/article/

californias-climate-risk-disclosure-law-paused-

what-sb-261s-injunction-means (discussing the

legal landscape following the Ninth Circuit’s

injunction).

253

See Adopting Release, section IV.A.4.

254

See Adopting Release, section II.A.3.

255

See supra notes 195 and 198.

256

See supra note 198.

257

See Adopting Release, section IV.A.4.

258

See supra note 199.

259

See Adopting Release, section IV.A.5.a.

260

This section of the release refers to these

keywords collectively as ‘‘climate-related

keywords.’’ The selection of climate-related

keywords is a combination of keywords used in the

Final Rules and those identified in Christine Chou,

Robin Clark & Steven O. Kimbrough, What Do Firms

Say in Reporting on Impacts of Climate Change? An

Approach to Monitoring ESG Actions and

Environmental Policy, 30 Corp. Soc. Resp. & Env’t

Mgmt. 2671 (2023).

2025 to largely end the reporting

program.

246

The proposed amendments,

if adopted would eliminate program

obligations to disclose GHG emissions

for most source categories (e.g., power

plants, cement and steel) in addition to

delaying the requirement to report GHG

emissions for the remaining source

categories until 2034.

247

In the Adopting Release, the

Commission also discussed the climate-

related reporting requirements set forth

in California’s Climate-Related

Financial Risk Act (‘‘Senate Bill 261’’)

and Climate Corporate Data

Accountability Act (‘‘Senate Bill

253’’).

248

In November 2025, the Ninth

Circuit granted a motion to enjoin

enforcement of Senate Bill 261 and

denied a motion to enjoin enforcement

of Senate Bill 253.

249

As a result,

although litigation remains ongoing,

companies subject to Senate Bill 253

will be required to disclose their Scope

1 and Scope 2 emissions beginning in

2026

250

and their Scope 3 emissions

beginning in 2027.

251

But companies

subject to Senate Bill 261 will not be

required to begin reporting their

climate-related financial risks and

measures in 2026 as Senate Bill 261

originally required unless the litigation

concludes and the Ninth Circuit

upholds Senate Bill 261.

252

c. International Disclosure

Requirements

Registrants that are listed or operate

in jurisdictions outside the United

States may also be subject to those

jurisdictions’ disclosure and reporting

requirements. As a result, some

registrants subject to the Final Rules

may have in place, or be developing,

processes and systems to track and

disclose information about climate-

related matters. For example, in the

Adopting Release, the Commission

discussed the TCFD’s framework for

climate-related financial reporting and

the plan for several jurisdictions to

support or adopt climate disclosure

requirements consistent with the TCFD

recommendations.

253

In the Adopting Release, the

Commission further discussed the

ISSB’s climate-related disclosure

standards and the fact that several

jurisdictions had announced plans to

adopt, apply, or otherwise be informed

by the ISSB standards.

254

In December

2025, the ISSB issued amendments to

IFRS S2 to, among other things, reduce

complexity, the risk of duplicative

reporting and the cost of applying

specific GHG emissions disclosure

requirements by clarifying the Scope 3

reporting requirements and excluding

the requirement to disclose certain

emissions.

255

The ISSB stated that the

amendments were aimed to reduce

complexity, the risk of duplicative

reporting and the cost of applying

specific GHG emissions disclosure

requirements in IFRS S2, while not

significantly reducing the usefulness of

information for users of general purpose

financial reports.

256

In the Adopting Release, the

Commission also discussed the

reporting requirements for certain

companies to disclose their GHG

emissions under the CSRD.

257

In

February 2026, the EU adopted

legislation revising the CSRD and

CSDDD to, among other things, narrow

the scope of covered companies under

the CSRD and postpone the

implementation timelines of relevant

Directives.

258

3. Current Market Practices

This section updates staff analyses in

the Adopting Release that described

then current market practices with

regard to several types of climate-related

disclosures, including those made in

Commission filings and in other

contexts. These practices display

variation over time and across several

dimensions, such as by disclosure type,

by status as an LAF, AF, NAF, EGC and/

or SRC (‘‘filer status’’), by industry, or

with respect to their use of third-party

assurance. In addition, this section

describes recent changes in selected

third-party climate disclosure

frameworks that may influence the

disclosures described above.

a. Climate-Related Disclosures in

Commission Filings

In the absence of the Final Rules’

implementation, the SEC’s existing

disclosure obligations elicit disclosure

about material climate-related matters.

Registrants may also voluntarily choose

to disclose climate-related information.

To help inform on current disclosure

practices, Commission staff updated the

analysis included in the Adopting

Release regarding climate-related

disclosures in Commission filings.

259

Commission staff reviewed 87,865

annual reports (Forms 10–K and 20–F)

submitted from January 1, 2016, to

December 31, 2025, to determine the

number containing any of these climate-

related keywords: ‘‘climate change,’’

‘‘climate risk,’’ ‘‘global warming,’’

‘‘greenhouse gas(es)’’ or ‘‘GHG

emission(s).’’

260

As in the Adopting

Release, the staff assumed that the

presence of any of these climate-related

keywords in any part of the annual

report indicates disclosure of some

climate-related information, but this

keyword analysis is not meant to

capture the substantive depth or quality

of climate-related disclosure. This

analysis also does not purport to

identify causality, such as the extent to

which observed market practices result

from specific market events, policies, or

regulations (including the Commission’s

development and adoption of the Final

Rules). We include this analysis because

it is a useful descriptive statistic for

characterizing current market practices

and is consistent with prior Commission

analysis in the Adopting Release. This

analysis, which is empirical evidence

on existing disclosure practices under

the 2010 Guidance, helps provide a

more complete picture of the current

baseline for the purpose of evaluating

the incremental effects of the proposed

rescission.

Table 1 summarizes the incidence of

any of the aforementioned climate-

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Foreign private issuers who elected to file

their annual report on Form 10–K would be classified as domestic filers for the purposes of this

analysis of climate-related keywords.

related keywords in Forms 10–K and

20–F filed from January 1, 2024, to

December 31, 2025. The data show that

about 47 percent of all filings submitted

in 2024 and 2025 contained at least one

climate-related keyword. The

proportion is greater, about 52 percent,

among foreign private issuers filing on

Form 20–F.

261

Figure 1 shows that the percentage of

Form 10–K and Form 20–F filings that

contain climate-related keywords has

increased between 2016 and 2025,

particularly as of 2021.

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See Matteo Tonello, Corporate Climate

Disclosures and Practices: Risk, Emissions, and

Targets, Harv. L. Sch. Forum on Corp. Governance

(May 3, 2025) (‘‘Corporate Climate Disclosures and

Practices: Risk, Emissions, and Targets’’), available

at https://corpgov.law.harvard.edu/2025/05/03/

corporate-climate-disclosures-and-practices-risk-

emissions-and-targets/.

Table 2 shows the breakdown of

annual filings with any of the climate-

related keywords by filer status in 2024

and 2025. In both years, the share of

filings with climate-related keywords

submitted by LAFs and AFs was

significantly greater than the share of

filings with climate-related keywords

submitted by NAFs. For example, in

2024 and 2025, 79 and 81 percent of

filings submitted by LAFs contained

climate-related keywords, compared to

33 percent of those submitted by NAFs.

Relatedly, one report finds that 84

percent of S&P 500 companies disclosed

climate change as a risk factor in

2024.

262

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Table 3 presents the analysis of

climate-related keywords in

Commission filings, broken down by

SRC and EGC status. The share of filings

with climate-related keywords is

generally lower for issuers that are

either SRCs, EGCs, or both, as compared

to issuers that are neither SRCs nor

EGCs.

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Table 4 provides a breakdown of the

recent filings by industry and shows

that the industries with the highest

percentage of annual reports containing

climate-related keywords include

transportation and utilities (i.e.,

communications, electric, gas, and

sanitary services), mining, and

construction.

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263

See Corporate Climate Disclosures and

Practices: Risk, Emissions, and Targets.

264

We analyzed text within a 300-character

neighborhood of each identified climate-related

keyword for the presence or absence of any of the

following keywords related to economic effects:

‘‘cost*,’’ ‘‘demand,’’ ‘‘sales,’’ ‘‘price*,’’ ‘‘revenue*,’’

‘‘profit*,’’‘‘liability,’’ ‘‘litig*,’’ ‘‘competiti*,’’

‘‘reputation*,’’ ‘‘customer*,’’ ‘‘consumer*,’’ and

‘‘counterpart*.’’

Other sources also report variation in

climate-related disclosures across

industries. For example, one report

finds that, as of 2024, most public

companies across the Russell 3000 and

S&P 500 disclose their exposure to

climate risk, especially in certain

industries, such as utilities, energy, and

real estate, materials and consumer

staples.

263

To help inform on the context in

which registrants may use climate-

related keywords in their 10–K and 20–

F filings, Commission staff conducted

additional analysis. Commission staff

examined those filings containing any of

the climate-related keywords for the

presence of additional economics-

related keywords within the vicinity of

a climate-related keyword.

264

Figure 2

shows that, in every year from 2016 to

2025, at least 70 percent of filings with

a climate-related keyword also

contained an economics-related

keyword in the vicinity of a climate-

related keyword.

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Filings are grouped by industry based on the

industry identified by Standard Industrial Classification (SIC) Division Structure of the

registrant that made the filing. See SIC Manual.

For those filings that contain any of

the climate-related keywords over the

period 2024–2025, Table 5 provides a

breakdown by industry and shows

which industries have the highest

percentage of filings with an economics-

related keyword.

265

The data show that

filings containing an economics-related

keyword were more prevalent in

industries such as mining, construction,

transportation and utilities, and retail

trade.

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See Adopting Release, section IV.A.5.b.ii.

267

See supra note 19 for an explanation of these

terms.

268

This analysis is based on currently available

LSEG data on Scope 1 and Scope 2 emissions and

thus does not necessarily reflect information on

Scope 1 and Scope 2 emissions that are required to

be disclosed under the Final Rules.

269

There are caveats to the LSEG data. To the

extent that LSEG is not able to fully track all

emissions disclosures, the disclosure rates

calculated from LSEG data may understate the

average disclosure rates for all Commission

registrants. Conversely, to the extent that LSEG’s

coverage universe (i.e., the Russell 3000) excludes

smaller registrants that are less likely to report on

emissions disclosures, the disclosure rates

calculated from LSEG data may overstate the

average disclosure rates for all Commission

registrants.

270

Companies in the LSEG database were

matched to Commission data on Commission

registrants by ISIN, CUSIP, or ticker symbol.

Overall, 5,391 registrants were matched to

companies in the LSEG database. The final matched

sample of 5,391 registrants comprises 2,713

registrants that are either SRCs or EGCs, along with

2,668 other registrants that disclosed their filer

status and 10 registrants that did not disclose their

filer status.

271

Because data collection of GHG emissions

disclosure can lag by 18 months or longer, FY 2022

and FY 2023 are the most recent years for which

data are largely complete.

b. GHG Emissions

Commission staff also updated the

analysis included in the Adopting

Release regarding GHG emissions

reporting.

266

Commission staff analyzed

London Stock Exchange Group

(‘‘LSEG’’) data on Scope 1 and Scope 2

emissions

267

disclosed by Commission

registrants.

268

LSEG compiles these data

from companies’ annual filings,

sustainability reports, and other public

disclosures.

269

Companies in the LSEG

data we analyzed were matched to

Commission data on Commission

registrants, and the LSEG data we

analyzed covers 5,391 Commission

registrants.

270

Table 6 shows that, in

fiscal year 2022, 21 percent of these

registrants (1,152 out of 5,391) reported

their Scope 1 or Scope 2 emissions.

LAFs had the highest disclosure rate (51

percent), while SRCs and EGCs had the

lowest disclosure rate (1 percent). Table

6 also shows that about 23 percent of all

registrants disclosed their Scope 1 or

Scope 2 emissions in fiscal year 2023,

with about 55 percent of LAFs

disclosing either their Scope 1 or Scope

2 emissions.

271

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See Corporate Climate Disclosures and

Practices: Risk, Emissions, and Targets.

273

See Deloitte & Touche LLP, 2024

Sustainability Action Report (July 2024), available

at https://www.deloitte.com/content/dam/assets-

zone3/us/en/docs/services/audit-assurance/2024/

2024-sustainability-action-report.pdf.

274

See Adopting Release, section IV.A.5.d.

275

See Corporate Climate Disclosures and

Practices: Risk, Emissions, and Targets.

276

Id.

277

Id.

Other sources report on corporate

disclosures relating to GHG emissions.

One report finds that, in 2024, more

than 50 percent of Russell 3000

companies disclosed each of Scope 1

and Scope 2 emissions, while the

percentages of S&P 500 companies

making these disclosures exceeded 90

percent.

272

Another report, based on a

2024 survey of 300 executives at

companies with annual revenues of at

least $500 million, finds that most of

these firms are reporting on Scope 1 and

Scope 2 emissions and also documents

heterogeneity across industries with

respect to emissions reporting.

273

c. Disclosures of Climate-Related

Targets

To update the discussion in the

Adopting Release,

274

Commission staff

reviewed current information about

disclosures of climate-related targets.

One report shows that the share of

companies disclosing a climate-related

target in the Russell 3000 almost

doubled from 2021 to 2024, increasing

from 22 percent to 41 percent.

275

This

report shows an even greater proportion

of S&P 500 companies setting targets,

with 73 percent in 2021 growing to 87

percent in 2024.

276

In addition, this

report shows heterogeneity across

industries with respect to climate-

related targets. In 2024, disclosure rates

for climate-related targets were highest

among Russell 3000 companies in the

Utilities (85 percent), Materials (73

percent), Consumer Staples (64 percent),

Real Estate (57 percent) and Energy (55

percent) industries.

277

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See Adopting Release, section IV.A.5.c.

279

See, e.g., Inst. of Corp. Resp. & Sustainability,

Key ESG Reporting Frameworks (Jan. 2024),

available at https://icrs.info/media/ykfoj5ib/key-

esg-reporting-frameworks-january-2024.pdf

(identifying 16 distinct third-party disclosure

frameworks, some of which were not discussed in

the Adopting Release). The frameworks discussed

in the report include six regulatory disclosure

requirements and standards, six sustainability

reporting frameworks and indices, and four

reporting disclosure frameworks and standards that

are characterized as forthcoming within three years.

280

See, e.g., supra section IV.B.2.c (discussing

developments in international disclosure

Commission staff also updated

analysis in the Adopting Release that

examined the Bloomberg ESG database,

which is focused on registrants listed on

NYSE and Nasdaq. This database

reports Bloomberg analysis on counts of

registrants with climate-related targets

and goals. The updated results, which

are based on 2024 data, are reported in

Table 7 below. The results are generally

consistent with data from the sources

discussed above.

d. Third-Party Frameworks for

Disclosure

To update the discussion in the

Adopting Release regarding third-party

climate disclosure frameworks,

Commission staff reviewed current

information about third-party disclosure

frameworks, which were discussed in

the Adopting Release.

278

Such

frameworks, which were developed

with the aim of helping firms and

investors identify, measure, and

communicate climate-related

information and incorporate that

information into business practices,

continue to take diverse approaches to

disclosure

279

and to evolve.

280

For

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requirements for climate-related matters since the

adoption of the Adopting Release).

281

See IFRS Found., Introduction to the ISSB and

IFRS Sustainability Disclosure Standards, https://

www.ifrs.org/sustainability/knowledge-hub/

introduction-to-issb-and-ifrs-sustainability-

disclosure-standards/.

282

See Corporate Climate Disclosures and

Practices: Risk, Emissions, and Targets.

283

See Governance & Accountability Institute,

Inc., 2025 Sustainability Reporting in Focus (2025),

available at https://www.ga-institute.com/research/

research/sustainability-reporting-trends/2025-

sustainability-reporting-in-focus/ (‘‘2025

Sustainability Reporting in Focus’’); Ctr. for Audit

Quality, S&P 500 Sustainability Reporting and

Assurance Analysis (June 2025), available at https://

www.thecaq.org/sp-500-and-esg-reporting (‘‘2025

CAQ Analysis’’); S&P Global, S&P Global’s Top 10

Sustainability Trends to Watch in 2025 (Jan. 15,

2025), available at https://www.spglobal.com/

sustainable1/en/insights/2025-esg-trends (‘‘2025

S&P Trends’’); Corporate Climate Disclosures and

Practices: Risk, Emissions, and Targets.

284

See 2025 Sustainability Reporting in Focus.

285

See 2025 CAQ Analysis. The analysis in this

report excludes information disclosed by

companies in Commission filings.

286

See 2025 S&P Trends; Corporate Climate

Disclosures and Practices: Risk, Emissions, and

Targets.

287

See, e.g., Craig Lewis & Joshua White,

Deregulating Innovation Capital: The Effects of the

JOBS Act on Biotech Startups, 12 Rev. Corp. Fin.

Stud. 240 (2023); see also Michael Dambra &

Matthew Gustafson, Do the Burdens to Being Public

Affect the Investment and Innovation of Newly

Public Firms?, 67 Mgmt. Sci. 594 (2021) (finding

that the JOBS Act exemptions led to more efficient

investment for newly public companies with the

elimination of certain disclosure, auditing, and

governance requirements for a subset of newly

public firms).

288

Shareholder value would also be affected to

the extent that regulatory changes lessen

transparency and weaken investor protection. This

issue is discussed in further detail infra section

IV.C.2.

289

See Adopting Release, section IV.C.3.b. These

cost savings estimates do not reflect anticipated

changes to the filer statuses of certain affected

parties if the Filer Status Proposing Release is

adopted as proposed. Registrants that would be

newly eligible for NAF status under the proposal

would benefit from reduced compliance costs under

the Final Rules if the Final Rules were to go into

effect. Consequently, the cost savings from the

proposed rescission would be smaller than

estimated here.

290

See Adopting Release, section IV.C.3.a and

section IV.C.3.b.

291

See id., section IV.C.3.a.

292

See id., section IV.C.3.

example, the TCFD disbanded in 2023,

and its responsibilities were assumed by

the ISSB in 2024. The ISSB has

developed sustainability disclosure

standards that not only build on the

recommendations of the TCFD but also

integrate parts of other frameworks and

standards, to include the SASB

standards, the Integrated Reporting

Framework, the Climate Disclosure

Standards Board (CDSB) Framework

application guidance, certain

requirements and definitions used by

the International Accounting Standards

board, and the Greenhouse Gas

Protocol.

281

Corporate climate

disclosures and practices have evolved

alongside these frameworks. One report

finds that, over time, climate-related

‘‘[d]isclosures have . . . become more

structured and aligned with the

[TCFD].’’

282

e. Third-Party Assurance

To update the discussion in the

Adopting Release regarding third-party

assurance, Commission staff reviewed

recent trends in third-party assurance

for ESG reporting. Several reports

document growth in the use of external

assurance in sustainability reporting.

283

One report on trends in sustainability

reporting by Russell 1000 companies

shows an increase in these companies’

use of external assurance in every year

from 2020 to 2024, with 51 percent

using external assurance in 2024.

284

Another report shows an increase in the

use of external assurance by S&P 500

companies that reported sustainability

information, from 70 percent in 2022 to

73 percent in 2023.

285

This report also

states that S&P 500 companies reporting

on sustainability obtained external

assurance mostly for reporting on their

GHG emissions, but that the scope of all

activities subject to assurance has

become broader over time. At least two

other reports document growth in

companies’ use of external assurance for

emissions data in particular.

286

Commission staff analyzed Bloomberg

ESG data, which focuses on registrants

listed on the NYSE and Nasdaq, for

information as to whether

environmental policies and data were

subject to an independent assessment.

In 2024, 19 percent of registrants in the

Bloomberg ESG data disclosed their use

of external assurance. More than 91

percent of these registrants were LAFs,

and almost none of the registrants were

SRCs or EGCs.

C. Benefits and Costs

We are proposing to rescind the Final

Rules in their entirety. We discuss

below the benefits and costs of the

proposed rescission. We estimate

monetized benefits and costs per

affected registrant where possible, and

we present aggregate measures of the

monetized effects.

1. Benefits

a. Direct Benefits

The principal benefits of rescinding

the Final Rules would be in the form of

cost savings to registrants from not

having to comply with the Final Rules’

requirements. Reductions in compliance

costs decrease the resources that

registrants must devote to compliance

activities. As a result, registrants may

experience lower operating expenses

and increased cash flow, holding other

factors constant. Registrants may

allocate these savings toward capital

investment or other productive uses,

which may improve capital allocation

efficiency and expected future cash

flows.

287

The extent of these impacts is

influenced by factors such as the

availability of positive net present value

investment opportunities, managerial

incentives, and market conditions.

When compliance cost savings increase

a registrant’s profitability or free cash

flow, investors may benefit through

higher expected returns, including

potential increases in dividends, share

repurchases, or firm valuation. Also,

shareholder value may increase for

registrants when reductions in

compliance costs result in higher

expected future cash flows.

288

To estimate cost savings from the

proposed rescission, we started with the

cost estimates provided in the Adopting

Release and updated these estimates to

account for inflation since the Final

Rules were adopted in March 2024.

289

The cost estimates in the Adopting

Release were informed, in part, by

public comment letters. Commenters

offered a wide range of cost estimates,

suggesting that there was significant

variance in expected compliance costs

among registrants.

290

More generally,

the nature of the cost information used

to derive these estimates ranged from

survey results, estimates directly from

identifiable companies, estimates from

anonymous companies, and general

estimates, either based on industry

experience, fees for related services, or

derived as part of similar rulemaking

processes in other jurisdictions.

291

In

the Adopting Release, Commission staff

was unable to quantify all direct and

indirect costs of the Final Rules.

292

Similarly, as discussed below, our

quantified estimates of the cost savings

from the rescission of the Final Rules do

not include all direct and indirect cost

savings.

In Table 8, for those cost savings we

can monetize, we report estimates of the

initial cost savings and the annual costs

savings per affected registrant that are

associated with the rescission of each of

the principal requirements of the Final

Rules. The savings in initial costs

represent compliance cost savings from

registrants not incurring one-time

implementation costs. We assume that,

given the Commission’s stay of the Final

Rules, registrants have not incurred the

initial costs associated with the Final

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If some registrants have already incurred some

implementation costs, then their expected initial

cost savings would be lower.

294

See Adopting Release, section IV.C.3.b. As

explained below, we have updated the Adopting

Release’s estimates of the costs of the Final Rules’

requirements for inflation.

295

See id., section IV.C.3. A registrant’s

compliance costs under the Final Rules may be

lower if, for example, it does not conduct scenario

analysis, does not have material Scope 1 and 2

emissions, has no climate-related target or goal, and

has no applicable expenditures or financial

statement effects that require disclosure, thereby

avoiding the corresponding costs of the

aforementioned disclosure items.

296

If a registrant’s current disclosures are similar

to those required under the Final Rules, then the

registrant could already have incurred some costs

for preparing these disclosures and thus its

incremental costs to comply with the Final Rules

could be lower.

Rules’ implementation.

293

The savings

in annual costs represent recurring

annual cost savings from registrants not

having to comply annually with the

Final Rules’ requirements.

In Table 8, across individual

requirements, an affected registrant may

benefit from savings in initial costs that

range from $103,483 (Targets and goals)

to $526,850 (Financial statement effects

disclosures) and savings in annual costs

that range from $56,916 (Attestation of

Scope 1 and Scope 2 emissions

disclosure at the limited assurance

level) to $395,138 (Financial statement

effects disclosures). The largest cost

savings are associated with the

proposed rescission of the amendments

to Regulation S–X (Financial statement

effects disclosures). With regard to these

amendments to Regulation S–X, an

affected registrant would also save an

estimated $24,235 in incremental

annual audit fees under the proposed

rescission.

294

A registrant’s actual cost savings

could vary significantly from those

reported in Table 8 depending on

company characteristics, such as

company size, industry, business model,

the complexity of the company’s

corporate structure, existing climate-

related disclosure practices, and

internal expertise.

295

For instance, a

registrant’s cost savings from the

proposed rescission could be lower if it

already provides disclosures that are

similar to those required by the Final

Rules.

296

Even registrants for which

climate-related risks may have little to

no direct relevance to their particular

facts and circumstances would

experience cost savings under the

proposed rescission, as the Final Rules

require them to consider specific

aspects of climate-related risk

management on at least an annual basis

in order to make a determination about

whether they will be required to

disclose anything under the Final Rules.

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297

See, e.g., Adopting Release, sections II.C.1.c.,

II.D.1.c., II.D.4.b., II.F. and IV.C.2.

298

See id., section IV.C.1.b and section IV.E.2.

299

See id., section IV.C.1.b and section IV.C.2.b.

300

See id., section IV.C.1.b.

301

See id., section IV.C.2.d and section IV.D.

302

See id., section IV.C.2.b.

303

See id., section IV.C.2.f. and section IV.C.2.b.

304

See id., section II.N.3.

305

See 17 CFR 229.1507 (Item 1507).

306

See Adopting Release, section IV.C.2.f.

307

See id.

308

See id. The proposed rescission also would

rescind the amendments to 17 CFR 230.436

included in the Final Rules. Without these

amendments, which serve to limit section 11

liability for third-party assurance providers,

registrants that wish to voluntarily obtain third-

party assurance may find it more difficult to obtain

that assurance or refer to assurance reports in their

Securities Act registration statements.

309

See Adopting Release at 21850 n.2761.

310

See id, section IV.C.1.b.

311

See id. at 21740 n.1120.

312

See id., section IV.C.1.b. The Adopting Release

stated that over time the supply of third parties

with climate-related expertise would likely have

adjusted to correspond with the increased demand,

bringing some downward pressure on these third

parties’ fees. Also, the Adopting Release discusses

this indirect effect separately from its estimates of

the compliance costs associated with 17 CFR

229.1505. We cannot rule out, however, that these

estimated compliance costs could have accounted

for a potential increase in audit fees under the Final

Rules.

313

See Adopting Release, section IV.C.2.b. and

section IV.C.2.h.i.

314

See Adopting Release at 21690 n.287.

b. Indirect Benefits

In addition to the direct benefits

described above, the proposed

rescission would yield indirect benefits

for registrants, investors, and other third

parties by eliminating indirect costs of

the Final Rules.

1. Indirect Benefits to Registrants

The proposed rescission would

reduce the risk of competitive harm to

registrants by eliminating the

prescriptive disclosure requirements in

the Final Rules. Several commenters to

the Proposing Release expressed

concerns that the disclosure

requirements could elicit too much

information and could provide

competitors with insights into a

company’s business model, cost

structure, supply chain vulnerabilities,

or future strategic plans.

297

As a result,

a registrant could be placed at a

competitive disadvantage if rivals used

this information to adjust their own

strategies, target vulnerable areas, or

replicate innovative approaches. Even

with certain adjustments made in the

Final Rules—such as adding materiality

qualifiers and allowing flexibility in the

level of detail that must be

provided

298

—the Final Rules could still

elicit competitively sensitive or

proprietary information that competitors

could exploit or otherwise use to gain a

competitive advantage. For example, the

Final Rules’ requirement to disclose

scenario analysis assumptions and

inputs as well as information about

internal carbon prices, could reveal

competitively sensitive information,

such as asset allocation decisions.

299

The proposed rescission would also

remove potential disincentives for

registrants to implement strategies and

undertake certain actions to manage

climate-related risks where it would be

beneficial to do so but for the costs of

having to disclose such actions (which

could include potentially confidential

or proprietary information) under the

Final Rules.

300

Faced with the detailed

disclosure requirements in the Final

Rules, registrants might alter their

business strategies as they relate to

climate-related risks—not just to comply

with the requirements of the Final

Rules, but to manage the risks of legal

liability, litigation defense costs, and

reputational impacts. For example,

registrants might choose to abandon

climate-related targets and goals to

avoid associated disclosure obligations

or change their risk management

strategies in ways that are less than

optimal for the sake of achieving what

they perceive to be more favorable

climate-related disclosure.

301

Additionally, registrants might be less

willing to voluntarily develop or pilot

new climate strategies, scenario

analyses, or transition plans if doing so

would require detailed public

disclosure of sensitive forward-looking

information, potentially exposing them

to competitive risks or litigation.

302

Although the Final Rules attempted to

address these concerns by adding

materiality qualifiers and providing

some flexibility in how registrants can

satisfy the adopted requirements, the

potential remains that the Final Rules

might discourage voluntary climate

initiatives and innovation, especially

where registrants perceive that

disclosures required under the Final

Rules to increase their exposure to risk,

criticism, or litigation.

Also, the proposed rescission would

eliminate the additional litigation risk

associated with the Final Rules’

disclosure requirements.

303

Under the

Final Rules, any new disclosures

provided by the registrant would be

deemed ‘‘filed,’’ and thus subject to

liability under the Securities Act and

the Exchange Act.

304

Although the Final

Rules include safe harbor provisions for

certain forward-looking statements,

305

the required disclosures called for by

the Final Rules would result in

additional litigation risk for registrants.

For example, the Final Rules require

that any registrant that is not required

to include a GHG emissions attestation

report pursuant to Item 1506(a) disclose

certain information if the registrant’s

GHG emissions disclosure is voluntarily

subjected to third-party assurance.

306

Including these disclosures in

Commission filings would expose

registrants to additional liability and

accompanying litigation risk that could

deter some registrants from voluntarily

obtaining assurance, particularly if they

have lower confidence in the quality of

the services performed.

307

To the extent

that a registrant could have been

deterred or disincentivized from

voluntarily obtaining third-party

assurance due to these concerns, the

proposed rescission would remove this

deterrent.

308

Commenters to the

Proposing Release also raised concerns

that the additional litigation risks

associated with the proposed rules

could lead to an increase in audit costs

(to the extent auditors were also subject

to increased litigation risk) and higher

insurance costs for registrants and

auditors.

309

By rescinding the Final

Rules and eliminating the additional

litigation risk associated with increased

Commission disclosures, the proposed

rescission would eliminate these

potential costs.

310

Additionally, the Final Rules required

certain registrants—specifically LAFs

and non-exempt AFs—to obtain third-

party assurance over their GHG

emissions disclosures. Commenters to

the Proposing Release stated that there

was a limited supply of climate-related

experts and/or third-party assurance

providers.

311

Consequently, an

assurance requirement would cause an

increase in demand for such third

parties, which could result in these

experts and assurance providers

charging higher fees to registrants, at

least in the short term.

312

The proposed

rescission would eliminate these

potential adverse consequences of the

Final Rules, thus benefiting registrants.

2. Indirect Benefits to Investors and

Other Third Parties

The proposed rescission would

eliminate the risk of investor confusion

or information overload due to the

volume and scope of the disclosures

required by the Final Rules.

313

For

example, some commenters to the

Proposing Release stated that the highly

detailed disclosures required under the

proposed rules would confuse investors

by causing them to believe that climate-

related risks are more important than

other disclosed risks that are presented

in less detail.

314

Other commenters

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315

See Adopting Release at 21854 n.2799.

316

See Adopting Release at 21867 n.2925.

317

See Adopting Release, section IV.C.1.b

318

See id.

319

See id.

320

See id.

321

See supra section IV.B.1.

322

See supra sections III.C.1.a and IV.B.2.a.1.

323

See supra section IV.B.3 for a detailed

discussion of current market practice and the rate

of climate-related disclosure among registrants,

absent the Final Rules.

324

See 17 CFR 229.1502 and, for a registrant that

is a LAF or a non-exempt AF, 17 CFR 229.1505.

325

See 17 CFR 229.1501 and 17 CFR 229.1503.

326

See 17 CFR 210.14–01 and 17 CFR 210–14.02.

327

The Commission previously acknowledged the

uncertainty, complexity, and multidimensional

nature of climate-related risks, compounded by the

evolving nature of the science and methodologies

measuring their economic impacts; see Proposing

Release, section IV.B.2.b; see also Adopting Release

at 21690 n.289.

328

See Adopting Release, section II.A.1.a and

section II.A.3. Further, to the extent climate-related

information required to be disclosed under the

Final Rules subject to an applicable materiality

Continued

expressed concern about specific

disclosures such as the disclosure of

scenario analysis, stating that the results

could confuse investors to the extent

that they inadvertently suggest that the

chance of a loss occurring due to a rare

event is more likely.

315

Others stated

that the financial statement disclosures

could confuse or distract investors from

other factors that have more significant

impacts on the financial statements.

316

In response to these concerns, the Final

Rules included materiality qualifiers for

certain required disclosures and

quantitative thresholds for financial

statement disclosures. The Final Rules’

structured data requirements could also

serve to mitigate these concerns by

providing a means for certain investors

to organize and process the required

disclosures. Nonetheless, the possibility

remains that the volume and scope of

information required to be disclosed

under the Final Rules could unduly

emphasize one particular type of risk

that a registrant may face or reduce the

practical utility of the disclosures for

investors.

The proposed rescission would also

eliminate the risk that registrants could

pass on their compliance costs to third

parties, such as consumers, workers,

and shareholders. The Commission

acknowledged in the Adopting Release

that third parties could bear some of the

increased costs of compliance arising

from the Final Rules and that this effect

may be more pronounced in certain

industries than in others.

317

Although

the Commission made certain changes

in the Final Rules to mitigate these

effects, the Final Rules would

nevertheless impose significant new

compliance costs on registrants, which

could be passed on to third parties.

318

By eliminating the Final Rules’

compliance costs, the proposed

rescission would eliminate these

potential pass through effects, thereby

benefiting these third parties. Relatedly,

certain of the Final Rules’ disclosure

requirements could result in registrants

seeking input from third-parties, such as

the requirement to disclose material

impacts from climate-related risks on

purchasers, suppliers, or other

counterparties to material contracts with

registrants.

319

The Final Rules sought to

limit the compliance burden of this

requirement by limiting information

that is required to be disclosed to that

which is ‘‘known or reasonably

available.’’ However, this requirement

could still impose costs on third parties

whose relationship with the registrant is

most likely to materially impact the

registrant’s strategy, business model and

outlook, as well as third parties from

whom the registrant might be best

positioned to request information. The

proposed rescission would eliminate

these costs.

Lastly, the proposed rescission could

benefit certain third parties, such as

ESG information providers, third-party

framework providers, specialty

investment research providers, and

environmental investing groups, as the

increased disclosures in the Final Rules

could have reduced institutional

investors’ reliance on these information

providers, which could have hurt these

providers.

320

2. Costs

a. Direct Costs

The proposed rescission would

eliminate the requirements in the Final

Rules that registrants disclose highly

granular information on climate-related

matters in a standardized and

centralized format in Commission

filings. The direct costs of the proposed

rescission would be borne by those

subgroups of affected parties (including

certain investors, financial

intermediaries, and other stakeholders)

who would use this information as part

of their particular strategies (e.g.,

investment, advocacy).

321

The proposed

rescission could make it more difficult

for those affected parties to incorporate

climate-related information into their

valuation of registrants’ securities and to

make informed investment decisions.

We discuss below the direct effects of

the proposed rescission on the scope,

standardization, and centralization of

climate-related information, including

factors that could mitigate the

magnitude of those effects.

1. Scope

The proposed rescission could reduce

the scope of climate-related

information—in terms of how much and

what types of information must be

disclosed—available to those investors

who would use this information as part

of their investment strategies. In the

absence of the Final Rules, the SEC’s

existing disclosure requirements elicit

disclosure of information about material

climate-related matters and would

continue to do so should the Final Rules

be rescinded.

322

Many registrants,

including in industries with higher

carbon footprint (e.g., transportation and

utilities, mining, construction), are

providing climate-related information in

their annual reports on Form 10–K or

20–F absent the requirement to comply

with the Final Rules.

323

Where climate-

related matters are material, the SEC’s

existing disclosure requirements give

registrants flexibility to determine the

specific information about those risks to

provide investors. In contrast, the Final

Rules specify an extensive list of

disclosures that registrants must

provide, such as disclosures under Item

1502 (Strategy) and, for registrants that

are LAFs and non-exempt AFs, Item

1505 (GHG emission metrics) of

Regulation S–K.

324

Also, the Final Rules

require some disclosures regardless of

materiality, such as certain disclosures

under Item 1501 (Governance) and Item

1503 (Risk management) of Regulation

S–K.

325

In addition, the Final Rules

create Article 14 to Regulation S–X,

which requires registrants to disclose, in

a note to their audited financial

statements, a series of climate-related

financial statement effects and provide

contextual information describing how

each specified effect was derived,

including a description of significant

inputs and assumptions used,

significant judgments made, and other

information that is important to

understand the effect.

326

The impact of the reduction in scope

of climate-related information under the

proposed rescission could be partially

mitigated, however. As discussed in

section IV.B.3.d, as it relates to climate-

related matters, disclosure frameworks

and methodologies for measuring the

economic impacts of these risks

continue to evolve.

327

In this context,

and as the Adopting Release

acknowledged, the Final Rules’ granular

approach to disclosures could

increasingly result in disclosure of less

useful information to those subgroups of

affected parties who would use climate-

related information as part of their

particular strategies.

328

Also, existing

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threshold does not (or would not in the future) meet

that materiality threshold, the rescission of those

requirements may ultimately result in minimal

information loss.

329

See supra section IV.B.2. for a discussion of

the current regulatory disclosure framework.

330

See 17 CFR 229.1500 (Item 1500) (Definitions).

331

See 17 CFR 229.1502 (Item 1502) (Strategy).

332

See 17 CFR 229.1501 (Item 1501)

(Governance).

333

See 17 CFR 229.1505 (Item 1505) (GHG

emissions metrics).

334

See 17 CFR 229.1502 (Item 1502) (Strategy)

and 17 CFR 229.1505 (Item 1504) (Targets and

goals).

335

See Adopting Release, section IV.B and

section IV.C.1.a.

336

See supra section IV.B.2.

337

See Adopting Release, section IV.C.2.b.

338

Id.

339

See Adopting Release, section IV.C.2.e.

340

Id.

State, Federal and international

disclosure requirements could elicit

climate-related disclosure from

registrants that would otherwise have

been required to provide disclosure

under the Final Rules.

329

Registrants

may also be subject to disclosure

regimes in other jurisdictions that elicit

climate-related information, and

registrants may choose to voluntarily

disclose climate-related information to

address investor interest.

2. Standardization

To facilitate comparability across

registrants, the Final Rules mandate the

disclosure of climate-related

information in a standardized format by

creating a structured set of disclosure

categories and requiring registrants to

use consistent definitions, terminology,

and measurement units. The Final Rules

create new Subpart 1500 of Regulation

S–K (Items 1500–1506), whose

provisions define certain climate-related

concepts and establish consistent

disclosure categories for registrants to

use when describing climate-related

risks. These disclosure categories

require registrants to describe, using

consistent definitions and

terminology,

330

the nature and time-

horizon of climate-related risks and how

these risks have affected, or are

reasonably likely to affect, their strategy,

results of operations, or financial

condition.

331

All registrants are required

to disclose consistent information about

how their board of directors oversee

climate-related risks and how

management identifies and manages

those risks.

332

Additionally, the Final

Rules seek to normalize the disclosure

of certain quantitative metrics related to

GHG emissions using standardized units

and recognized measurement

frameworks.

333

Companies that adopt

climate-related targets or goals,

transition plans, or used scenario

analysis to manage climate-risks, are

also required to disclose standardized

information about those commitments,

including the baseline year, the scope of

emissions covered, the time horizon for

achieving targets, and progress toward

the goal.

334

The impact of the proposed rescission

on the comparability of certain climate-

related information would be mitigated

to the extent that similar information is

provided in a comparable format absent

the Final Rules.

335

When climate

matters including transition risk,

materially affect or threaten the

operations or financial performance of a

registrant, various existing Commission

disclosure rules already require the

registrant to discuss these effects in

specific disclosure categories. Such

rules include disclosure requirements in

Regulation S–K related to the

description of business (Item 101), legal

proceedings (Item 103), risk factors

(Item 105), and management’s

discussion and analysis of financial

condition and results of operation (Item

303).

336

The 2010 Guidance also noted

that registrants must consider any

financial statement implications in

accordance with applicable accounting

standards.

Although the Final Rules are intended

to improve comparability overall,

certain provisions of the Final Rules

result in variation in how registrants

report certain climate-related

information, expenditures, and impacts,

thus lessening the overall effects of the

proposed rescission on comparability.

The Final Rules include conditional

disclosure requirements that apply only

when companies engage in certain

climate-related practices. For example,

disclosures regarding climate target or

goals, transition plans, or internal

carbon pricing are required only if a

company had adopted these

practices.

337

Registrants that actively

manage climate risks through formal

targets or transition planning would

thus disclose substantially more

information than registrants that do not,

even if the underlying risks they face are

comparable. Consequently, differences

in corporate practice rather than

differences in climate-related exposure

might drive variation in disclosures.

Also, the Final Rules require that

registrants describe quantitatively and

qualitatively the material expenditures

incurred and material impacts on

financial estimates and assumptions as

a direct result of transition activities.

The Adopting Release acknowledges

that registrants may take different

approaches in their determination of

which expenditures to include and

whether to quantitatively or

qualitatively identify portions of

expenditures specifically tied to these

activities, which would diminish the

comparability benefits of the

disclosures.

338

Similarly, under the

Final Rules, registrants retain discretion

in emissions measurement

methodology.

339

Within existing

frameworks, registrants can use different

operational boundaries, estimation

techniques, or data sources depending

on their business activities and data

availability. These methodological

differences could lead to variation in

reported emission levels, potentially

limiting the ability of interested

investors to compare emission metrics

directly across registrants or

industries.

340

A similar comparability challenge

arises with respect to the Final Rules’

climate-related financial statement

disclosures. Although these disclosures

must follow prescribed standards,

certain elements of the process for

determining whether disclosures would

be required would involve registrants

exercising judgment or discretion. For

example, the Final Rules would have

required registrants to determine what

constitutes a ‘‘severe weather event or

other natural condition’’ based on the

registrant’s particular risks and other

factors such as a registrant’s historical

experience. The Final Rules also would

have required registrants to exercise

judgment in assessing whether severe

weather events or other natural

conditions were a ‘‘significant

contributing factor’’ in incurring costs,

expenditures, charges, losses, or

recoveries. Firms may have

implemented these aspects of the Final

Rules differently depending upon the

methodologies or internal data systems

they use, how these events and

activities interact with other economic

factors, and the industries and

geographic environments in which the

registrants operate. As a result, similar

events and activities could be reflected

differently in registrants’ financial

statement disclosures. Moreover, the

financial statement disclosures would

have involved estimation uncertainties

that would be driven by the application

of judgments and assumptions that

might lead to variation in reported

climate-related disclosures across firms.

Investors might thus face difficulties in

interpreting differences in reported

disclosures, as those differences might

reflect methodological choices rather

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341

See 17 CFR 229.1508 (Item 1508) (Interactive

data requirement).

342

See supra section IV.B.2.a.1.

343

For example, interactive data files are not

typically required for initial public offerings other

than those conducted by special purpose

acquisition companies. Compare 17 CFR

229.601(b)(101)(i)(A) (providing that registrants

conducting initial public offerings are not obligated

to tag any disclosures until they file their first post-

initial public offering periodic report on Form 10–

Q, Form 20–F, or Form 40–F), with 17 CFR

229.601(b)(101)(i)(D) (requiring the tagging of

information disclosed pursuant to subpart 1600 of

Regulation S–K [17 CFR 229] in Inline XBRL for

initial public offerings conducted by special

purpose acquisition companies).

344

Over time, additional firms could enter the

markets for providing emissions accounting tools,

climate risk modeling, ESG analytics, and

environmental consulting. The entry of these firms

could introduce some downward pressure on the

fees charged to registrants in these markets.

345

See Adopting Release, section IV.C.1.b.

346

In each table, all numbers have been rounded

to the nearest whole number.

347

See supra section IV.B.1.

348

As we acknowledge above, cost savings could

vary across registrants depending on company

characteristics, such as company size, industry,

business model, the complexity of the company’s

corporate structure, existing climate-related

disclosure practices, and internal expertise. A

registrant’s cost savings from the proposed

rescission could be lower if the registrant already

provides disclosures that are similar to those

required by the Final Rules and continues to do so.

See supra notes 295 and 296.

349

See supra section IV.C.1.a.

than underlying economic exposure to

climate-related risks.

3. Centralization

Lastly, the Final Rules centralize

climate-related information within

Commission filings. The Final Rules

require specific climate-related

disclosures to appear in annual reports

and registration statements, and they

require the reporting of specific climate-

related financial statement effects in the

notes to the audited financial

statements. Centralizing this

information in Commission filings

would allow it to be readily accessed

from one source rather than having to be

compiled from multiple different

sources. Centralization in Commission

filings would also subject the

information to potential liability under

the Securities Act and Exchange Act,

thereby potentially increasing its

reliability. In addition, the Final Rules

require that the climate-related

disclosures included in Commission

filings be tagged in the Inline XBRL

structured data language (on a phased in

basis), for the purpose of making those

disclosures more readily available for

aggregation, comparison, filtering, and

other enhanced analytical methods.

341

Under the proposed rescission, these

requirements would no longer apply,

thus reducing the benefits of

centralization. The 2010 Guidance

emphasizes that certain disclosure

requirements in Regulation S–K and

Regulation S–X may require disclosure

about climate-related matters, and such

disclosures are typically discussed

within broader sections, such as Item

105 of Regulation S–K (Risk factors) or

Item 303 of Regulation S–K

(management’s discussion and analysis

of financial condition and results of

operation).

342

With certain exceptions,

disclosure responsive to such provisions

would be required to be tagged in the

Inline XBRL structured data

language.

343

Nonetheless, the proposed

rescission could increase information

search costs for those subgroups of

affected parties who would use climate-

related information as part of their

particular strategies. Those affected

parties might need to devote more

resources and time to collect and

reconcile climate-related information

from multiple sources outside of

Commission filings, some of which may

not be structured, thus likely increasing

the costs of their investment analyses.

b. Indirect Costs

The proposed rescission could have

indirect costs for third parties such as

ESG data providers, climate analytics

firms, environmental consulting firms,

and other professional advisory

services. These entities often process

and analyze corporate disclosures to

produce research reports, ratings, or

datasets used by other affected parties,

and they may use climate-related

disclosures as part of their risk

assessment or analytical activities. The

proposed rescission could raise these

entities’ costs of collecting and

analyzing corporate climate-related

data.

The Final Rules were expected to

boost demand for climate-related data,

analytics, and advisory services. As

registrants collect and disclose climate

information—such as GHG emissions,

governance practices, and climate-

related risk assessments—the demand

for specialized third-party services that

support measurement, verification, and

interpretation of these disclosures was

expected to increase. Firms that provide

emissions accounting tools, climate risk

modeling, ESG analytics, and

environmental consulting would thus

benefit from increased demand for their

services. This higher demand could also

allow these firms to benefit by charging

higher service fees to registrants, at least

in the short term.

344

The proposed

rescission would eliminate these effects

of the Final Rules.

The proposed rescission could also

affect assurance providers and

professional service firms. Under the

Final Rules, certain registrants would

eventually be required to obtain third-

party assurance for GHG emissions

disclosures. Even in cases where

assurance was not required, companies

might voluntarily seek external

verification to enhance the credibility of

their disclosures. This could create new

business opportunities for accounting

firms, environmental consultants, and

verification specialists to provide

assurance services related to climate

data, emissions measurements, and risk

assessments. Increased demand for

assurance providers and, more

generally, third parties with climate-

related expertise, could also lead these

providers and third parties to benefit by

charging higher fees to registrants, at

least in the short term.

345

The proposed

rescission would also eliminate these

effects of the Final Rules.

3. Aggregate Monetized Benefits and

Costs

Throughout this economic analysis,

we have estimated monetized benefits

and costs per affected registrant, where

possible. In this section, we present

aggregate measures of these monetized

effects. These totals include only

benefits and costs that are monetized in

the economic analysis and thus do not

encompass all of the proposed

rescission’s benefits and costs.

a. Initial and Annual Aggregate

Monetized Benefits and Costs

Tables 9, 10, 11, and 12 report initial

and annual benefits that are monetized

in this economic analysis, aggregated

across affected registrants by registrants’

filer statuses (Tables 9, 10, and 11) and

across all affected registrants (Table

12).

346

Because it was not practicable to

monetize the costs of the proposed

rescission, we do not report aggregate

monetized costs. To aggregate the

monetized benefits, we use estimates of

the numbers of affected registrants for

three groups of registrants: (1) LAFs, (2)

non-exempt AFs, and (3) SRCs, EGCs,

and NAFs.

347

For the purpose of

calculating aggregate monetized

benefits, we assume that all affected

registrants within a group of registrants

would incur the same cost savings (i.e.,

benefits).

348

In each of Tables 9, 10, and 11, we

report savings in initial costs and

savings in annual (recurring) costs per

affected entity, which we first presented

in Table 8.

349

We assume that, given the

Commission’s stay of the Final Rules,

registrants have not incurred the initial

costs associated with the Final Rules’

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This assumption is reasonable given the

Commission’s stay of the Final Rules less than one

month after the adoption of the Final Rules. To the

extent that registrants have incurred initial costs

associated with the Final Rules’ implementation,

then the initial cost savings from the proposed

rescission—and by extension the cost savings of the

proposed rescission—would be lower than we

estimate.

351

We use Time 0 to mark the effective date of

the rescission.

352

In other words, the 10-year horizon starts at

Time 0, which marks the effective date of the

rescission.

353

See OMB, Circular A–4, at 31 (stating that

‘‘[t]he ending point should be far enough in the

future to encompass all the significant benefits and

costs likely to result from the rule’’).

354

See Adopting Release, section II.O.

355

See Adopting Release, section II.O.

356

The Final Rules provide a phase-in for another

set of information—the material expenditures

disclosure requirement, which will be provided

pursuant to either Item 1502, as part of a registrant’s

strategy disclosure, or Item 1504 of Regulation S–

K, as part of a registrant’s targets and goals

disclosure. All three groups of registrants must

comply with the material expenditures disclosure

requirement in the fiscal year immediately

following the fiscal year of their initial compliance

date for the Final Rules based on their filer status.

We assume that costs for the material expenditures

disclosure were included in the quantified cost

estimates considered for strategy or targets and

goals disclosure. Because the material expenditures

disclosure will make up only part of a registrant’s

strategy or targets and goals disclosure and because

most of the disclosure requirements pursuant to

Item 1502 and Item 1504 are not subject to a phase-

in under the Final Rules, the tables below do not

account for the material expenditures phase-in. See

Adopting Release, section II.O.

357

See supra notes 291 and 292.

implementation.

350

Hence, for the

purpose of estimating the initial cost

savings from the proposed rescission,

we assume for all affected registrants

that the expected savings in initial costs

accrue immediately upon rescission of

the Final Rules (i.e., at Time 0).

351

For savings in annual costs, we

consider a 10-year horizon that starts

upon the rescission (Years 1–10).

352

This time horizon represents the period

over which the principal benefits and

costs that are monetized in the

economic analysis are expected to

accrue.

353

For each type of affected

entity, for each provision, savings in

annual costs start as of that provision’s

compliance date under the Final Rules.

Hence, within each of Tables 9, 10, and

11, the year-by-year breakdown of the

savings in annual costs reflects the

staggered compliance dates for the

different provisions under the Final

Rules. For example, as we show in

Table 9, LAFs need to comply with most

of the provisions in Year 2 but do not

need to comply with the Scope 1 and

Scope 2 requirements until Year 3 and

with the attestation requirement until

Year 6. Hence, across all provisions, the

expected cost savings for LAFs in Year

1 of the 10-year time horizon is $0.

As we show in Table 10, non-exempt

AFs are required to comply with the

Final Rules one year after compliance is

required for LAFs (i.e., in Year 3).

354

Thus, for non-exempt AFs, the expected

cost savings in Year 1 and Year 2 of the

10-year time horizon are $0. Lastly, as

shown in Table 11, SRCs, EGCs, and

NAFs are required to comply with the

Final Rules one year after compliance is

required for non-exempt AFs (i.e., in

Year 4).

355

As a result, the expected cost

savings for SRCs, EGCs, and NAFs are

$0 in Year 1, Year 2, and Year 3 of the

10-year time horizon. Similarly, Tables

9 and 10 incorporate the phase-in for

the Scope 1 and Scope 2 emissions

disclosure requirement and the

attestation requirement that applies to

LAFs and non-exempt AFs under the

Final Rules.

356

In each of Tables 9, 10, and 11, for

each year, we sum the cost estimates per

affected entity across all provisions to

obtain an estimate of the ‘‘annual cost

savings per registrant’’ for Time 0 and

each of the years in the 10-year time

horizon. In Table 9, which applies to

registrants with LAF filer status, the

estimated annual cost savings per

registrant range from $0 in Year 1 to

$960,919 in Year 10. In Table 10, which

applies to registrants classified as non-

exempt AFs, the estimated annual cost

savings per registrant range from $0 in

Year 1 to $855,549 in Years 8 to 10. In

Table 11, which applies to registrants

classified as SRCs, EGCs, and NAFs, the

estimated annual cost savings per

registrant range from $0 in Year 1 to

$732,687 in Years 4 to 10.

Within each table, we then multiply

the ‘‘annual cost savings per registrant’’

by the number of affected registrants to

obtain an estimate of ‘‘total annual cost

savings’’ for Time 0 and each of the

years in the 10-year time horizon, across

all provisions and all affected registrants

in that table. We then aggregate these

data in Table 12, which lists our

estimates of combined total annual cost

savings for Time 0 and each year,

summed across all three groups of

registrants. Across all three groups of

affected registrants combined, we

estimate a total cost savings of

$7,915,418,821 at Time 0 and total cost

savings that range from $1,720,349,390

to $5,559,716,550 across Year 2 through

Year 10. The estimated total annual cost

savings are relatively lower in Years 2

and 3 due to non-exempt AFs, SRCs,

EGCs, and NAFs having extended

compliance periods under the Final

Rules.

In sum, we estimate that the proposed

rescission would significantly reduce

regulatory compliance costs for

domestic registrants and foreign private

issuers affected by the Final Rules. We

caution that we have developed these

estimates under certain assumptions. In

particular, we assume that: (1) due to

the Commission’s stay order, registrants

have yet to incur any initial

implementation costs, and (2) the cost

savings estimate per affected entity

reported in Table 8 in section IV.C.1.a

applies to all registrants. As we noted in

that section, actual cost savings could

vary significantly across registrants

based on a number of factors.

357

Also,

as we have highlighted throughout this

economic analysis, our monetized

estimates of the cost savings from the

rescission of the Final Rules do not

include all direct and indirect cost

savings.

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358

See E.O. No. 12866, Regulatory Planning and

Review (Sept. 30, 1993) [58 FR 51735, 51741 (Oct.

4, 1993)] (requiring agencies to provide an analysis

of benefits, costs, and regulatory alternatives to

OIRA for significant regulatory actions); OMB,

Circular A–4, at 31–34, 45 (Sept. 17, 2003)

(providing guidance to agencies regarding

compliance with E.O. 12866); see also E.O. No.

14215, Ensuring Accountability for All Agencies

(Feb. 18, 2025) [90 FR 10447, 10448 (Feb. 24, 2025)]

(requiring independent regulatory agencies to

comply with E.O. No. 12866). In addition, E.O.

14192 requires agencies to provide their best

approximation of the total costs or savings

associated with each new regulation or repealed

regulation consistent with the analyses required by

E.O. 12866. See E.O. No. 14192, Unleashing

Prosperity Through Deregulation (Jan. 31, 2025) [90

FR 9065, 9066 (Feb. 6, 2025)].

359

See Circular A–4, at 32.

360

As explained above, this time horizon

represents the period over which the principal

benefits and costs that are monetized in the

economic analysis are expected to accrue. For the

purposes of this analysis, we assume the effective

date of the proposed rescissions, as well as the start

year for the analysis’s time horizon, is the present

year. The analysis uses calendar years and accounts

for the compliance periods included in the release.

361

See Circular A–4 at 32 (‘‘The Rationale for

Discounting’’) & 45 (‘‘Treatment of Benefits and

Costs over Time’’); see also OIRA, Regulatory

Impact Analysis: A Primer, at 11 (Aug. 15, 2011),

available at https://www.reginfo.gov/public/jsp/

Utilities/circular-a-4_regulatory-impact-analysis-a-

primer.pdf (‘‘To provide an accurate assessment of

benefits and costs that occur at different points in

time or over different time horizons, an agency

should use discounting. Agencies should provide

benefit and cost estimates using both 3 percent and

7 percent annual discount rates expressed as a

present value as well as annualized.’’); Harvey S.

Rosen & Ted Gayer, Public Finance 151 (8th ed.

2008) (defining present value as ‘‘the value today

of a given amount of money to be paid or received

in the future’’).

362

This approach is consistent with Circular A–

4. See Circular A–4, at 31–34 (stating that, ‘‘[f]or

regulatory analysis, [agencies] should provide

estimates of net benefits using both 3 percent and

7 percent’’ discount rates and discussing why those

rates are reasonable default rates).

363

Table 12 reports the one-time monetized

benefits as the total monetized savings in initial

costs earned at Time 0.

364

Table 12 reports the recurring annual

monetized benefits as the total monetized savings

in ongoing costs earned in Years 2 to 10.

365

This approach is consistent with the

recommended treatment of benefits and costs over

time in Circular A–4. See Circular A–4 at 45 (‘‘You

should present annualized benefits and costs using

real discount rates of 3 and 7 percent’’).

366

For each discount rate, the annualized

monetized benefits in Table 14 represent the

constant annual stream of benefits whose present

value over the 10-year horizon equates the

corresponding present value in Table 13.

367

The annualized benefits present these values

over the 10-year time horizon, starting in the

present year, even if recurring annual benefits

would actually start to be incurred at a later date

due to compliance periods.

b. Present Values and Annualized

Values of Aggregate Monetized Benefits

and Costs

Consistent with the requirements of

Executive Order 12866, the Commission

reports estimated total monetized

benefits for all affected entities in two

additional ways specified in OMB

Circular A–4.

358

The two presentations

are intended to address the fact that the

various benefits and costs of the

proposed rescission would not accrue at

the same point in time; rather, benefits

and costs that accrue sooner are

generally more valuable than those that

occur later in time.

359

As discussed

above, we are not able to monetize costs,

and as a result we cannot calculate

values for total monetized costs in these

presentations.

We report (1) the present values of

expected benefits that are monetized in

our economic analysis over a 10-year

time horizon, starting in 2026, as well

as (2) the annualized values over the

same time horizon that are derived from

the present values.

360

The present

values and annualized values account

for the timing of the benefits through

discounting, which is a procedure that

accounts for the time value of money.

361

Table 13 reports the present values of

the aggregate monetized benefits from

Table 12, combining initial and annual

monetized benefits. The analysis uses

annual real discount rates of 3 percent

and 7 percent over a 10-year time

horizon, starting in 2026.

362

We

estimate that the present value of total

monetized benefits is $42,254,086,329

using a 3 percent discount rate and

$35,400,350,447 using a 7 percent

discount rate.

Table 14 reports annualized

monetized benefits using real discount

rates of 3 percent and 7 percent over a

10-year horizon.

365

The lump sum

present values of monetized benefits

reported in Table 13 are converted in

Table 14 into a constant stream of

annualized benefits over a 10-year time

horizon, starting in 2026.

366

Annualized

benefits may differ from the recurring

monetized annual benefits discussed

earlier in this Economic Analysis

because they incorporate the timing of

benefits, through discounting, and

combine one-time and recurring

benefits.

367

As shown in Table 14, we estimate

that annualized total monetized benefits

are $4,880,796,996 per year using a 3

percent discount rate and

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See supra note 287.

$4,872,558,296 per year using a 7

percent discount rate. Because the

annualized benefits are discounted and

include both initial and annual benefits,

they should not be compared directly to the aggregate annual monetized benefits

in Table 12.

D. Anticipated Effects on Efficiency,

Competition, and Capital Formation

The proposed rescission would

eliminate the significant compliance

costs of the Final Rules for all affected

registrants. This is expected to promote

the efficiency of capital allocation by

reducing the resources that firms devote

to compliance activities and allowing

those resources to be reallocated toward

productive uses that increase firm

productivity and long-term growth, such

as capital investment, research and

development, or operational

improvements.

368

The magnitude of

these efficiency gains would depend in

part on the extent to which the

proposed rescission would reduce

disclosures that provide benefits to

investors. For those investors and

financial intermediaries who would use

climate-related information as part of

their investment strategies, the proposed

rescission could affect their ability to

incorporate such information in their

valuation of asset prices and to make

informed decisions about whether to

buy or sell securities. This could offset

some of the efficiency gains associated

with the elimination of the Final Rules’

compliance costs.

The proposed rescission is expected

to affect competition. Compliance costs

may function as fixed costs associated

with being a public company. Despite

the staggered compliance dates and

differential requirements, the Final

Rules impose on different registrant

types, these costs might not necessarily

scale proportionally to firm size and

thus could impose relatively greater

burdens on smaller firms or firms with

fewer resources. By reducing

compliance costs, the proposed

rescission is expected to lower barriers

to entry into public capital markets and

reduce the relative disadvantage faced

by SRCs or EGCs in accessing public

markets. As a result, the proposed

rescission could encourage additional

firms to become or remain public. The

proposed rescission would also reduce

the impact of Commission regulations

on the market for climate-related third-

party services.

The proposed rescission is also

expected to affect capital formation by

reducing the overall costs associated

with accessing and participating in

public capital markets. Increased

participation in public capital markets

may expand the set of investment

opportunities available to investors and

improve the functioning of capital

markets by increasing market liquidity

and depth. Increased competition

among firms seeking investment may

encourage these firms to operate more

efficiently, improve corporate

governance, and pursue growth

opportunities in order to attract

investors. Such effects would contribute

to more efficient capital allocation and

greater capital formation. Investors and

financial intermediaries who would use

climate-related information as part of

their investment strategies could,

however, require greater compensation

for increased uncertainty or information

asymmetries about climate-related

matters, which could increase some

registrants’ cost of capital.

E. Reasonable Alternatives

We considered whether a reasonable

alternative would be rescinding only

some of the Final Rules, or amending

them so that they apply to a smaller

subset of registrants or in more limited

circumstances. We preliminarily

concluded that these approaches would

not be reasonable due to concerns

regarding lack of legal authority, the

interconnectedness of the Final Rules,

and the inappropriateness and burden

of the Commission issuing disclosure

rules focused specifically on climate-

related matters, as discussed in further

detail in sections III.B and III.C. To the

extent we were to retain some aspects of

the Final Rules and/or narrow their

scope, there would be a reduction in

potential benefits (in the form of cost

savings) for registrants as compared to

the benefits of fully rescinding the Final

Rules. Similarly, there would be a

reduction in potential costs (in the form

of less comprehensive, standardized,

and centralized climate-related

disclosure) compared to the costs of

fully rescinding the Final Rules for

those investors who would use this

information as part of their investment

strategies. We invite comment on

possible reasonable alternatives that

would achieve the goals identified in

this release.

F. Request for Comment

We request comment on all aspects of

our economic analysis, including the

potential costs and benefits of the

proposed rescission of the Final Rules,

and whether the proposed rescission, if

adopted, would promote efficiency,

competition, and capital formation or

have an impact on investor protection.

Commenters are requested to provide

empirical data, estimation

methodologies, and other factual

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369

See supra section IV.C.1.a and notes 295 and

296.

370

See Adopting Release at 21894.

371

See 44 U.S.C. 3501 et seq.

372

See Adopting Release at 21894–21908.

support for their views, in particular, on

costs and benefits estimates.

Specifically, we seek comment with

respect to the following questions:

•Are there any costs and benefits to

any entity that are not identified or

mischaracterized in the above analysis?

•Are there any effects on efficiency,

competition, and capital formation that

are not identified or mischaracterized in

the above analysis?

•Are there any sources of data that

could provide a more precise estimation

of the potential cost savings that may

accrue to registrants if the Final Rules

are rescinded as proposed?

•Are there any sources of data

available that could be used to quantify

investors’ costs of not having access to

the standardized and centralized

climate-related disclosures upon the

rescission of Final Rules?

•We assume in the above analysis of

aggregate monetized benefits and costs

that due to the Commission’s stay order

registrants have yet to incur any initial

costs of complying with the Final Rules.

Is this characterization correct? If

registrants have already incurred some

of the implementation costs, what

would these costs be? Please provide

supportive data to the extent available.

•We calculate total annual costs

savings assuming that the annual cost

savings per affected registrant apply to

all registrants. We also note that actual

cost savings could vary significantly

across registrants based on a number of

factors, such as a registrant’s size,

industry, business model, the

complexity of the company’s corporate

structure, existing climate-related

disclosure practices, and internal

expertise.

369

Is this characterization

correct? We would be interested in

receiving estimates and data concerning

these factors.

•Would any data sources allow these

cost savings estimates to be apportioned

to separate provisions? Furthermore,

how would these cost savings estimates

vary across time horizons? For example,

the first year of implementation may

come with higher start-up costs while

subsequent years may come with lower

costs.

V. Paperwork Reduction Act

In the Adopting Release,

370

the

Commission noted that certain

provisions of our rules and forms that

would be affected by the Final Rules

contain ‘‘collection of information’’

requirements within the meaning of the

Paperwork Reduction Act of 1995

(‘‘PRA’’).

371

The titles for the affected

collections of information are:

•Form S–1 (OMB Control No. 3235–

0065);

•Form F–1 (OMB Control No. 3235–

0258);

•Form S–4 (OMB Control No. 3235–

0324);

•Form F–4 (OMB Control No. 3235–

0325);

•Form S–11 (OMB Control No. 3235–

0067);

•Form 10 (OMB Control No. 3235–

0064);

•Form 20–F (OMB Control No. 3235–

0288); and

•Form 10–K (OMB Control No.

3235–0063).

The Commission further estimated

incremental and aggregate increases in

paperwork burden resulting from the

Final Rules and set forth the requested

change in paperwork burden with

respect to each of the above collections

of information that it intended to submit

to OMB for review in accordance with

the PRA.

372

Because the proposed

amendments would rescind the Final

Rules in their entirety, we expect that

the proposed amendments would

reduce the paperwork burdens with

respect to each of the above collections

of information by the same amount that

the Commission estimated they would

increase under the Final Rules. The

following PRA Table 1 replicates the

requested change in paperwork burden

from the Adopting Release:

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373

Sec. & Exch. Comm’n, In the Matter of the

Enhancement and Standardization of Climate-

Related Disclosures for Investors (Order Issuing

Stay), Release No. 33–11280 (Apr. 4, 2024); see also

The Enhancement and Standardization of Climate-

Related Disclosures for Investors; Delay of Effective

Date, Release No. 33–11280 (Apr. 4, 2024) [89 FR

25804 (Apr. 12, 2024)] (Commission release

announcing delay of effective date).

374

5 U.S.C. 601 et seq.

375

5 U.S.C. 603.

376

5 U.S.C. 601(6).

377

See 17 CFR 240.0–10(a) and 17 CFR

230.157(a). The Commission has pending proposals

addressing the definition of ‘‘small organization’’

and ‘‘small business’’ under the Securities Act, the

Exchange Act, and the Investment Company Act of

1940 (‘‘Investment Company Act’’) for purposes of

the RFA. The Commission encourages commenters

to review these proposals to determine whether the

proposals might affect their comments on this IRFA.

See Filer Status Proposing Release (proposing

definitions of these terms under the Securities Act

and the Exchange Act); Amendments to the ‘‘Small

Business’’ and ‘‘Small Organization’’ Definitions for

Investment Companies and Investment Advisers for

Purposes of the Regulatory Flexibility Act,

Investment Company Act Release No. 35864 (Jan. 7,

2026) [91 FR 1107 (Jan. 12, 2026)] (proposing

definitions under the Investment Company Act).

378

Business development companies are a

category of closed-end investment company that are

not registered under the Investment Company Act

[15 U.S.C. 80a–2(a)(48)].

379

17 CFR 270.0–10(a). See supra note 377 with

respect to proposal addressing the definition of

‘‘small organization’’ and ‘‘small business’’ under

the Investment Company Act.

380

This issuer estimate is based on staff analysis

of issuers that filed an annual report (i.e., Form 10–

K or Form 20–F), excluding BDCs and issuers of

asset-backed securities, in calendar year 2025 and

had total assets of $5 million or less on the last day

of the fiscal year covered in that annual report.

381

This BDC estimate is derived from data

reported to the Commission (e.g., Forms 10–Q and

10–K) for the fourth quarter of 2025.

382

These estimates are based on staff analysis of

issuers potentially subject to the proposed

rescission of the Final Rule, excluding co-

registrants, during calendar year 2025. This analysis

is based on data from Commission XBRL filings and

manual review of filings submitted to the

Commission.

383

See Adopting Release at 21911.

As noted above, however, on April 4,

2024, the Commission issued an order

staying the effectiveness of the Final

Rules pending the completion of

judicial review (‘‘Stay Order’’),

373

and as

a result the Final Rules have never gone

into effect and will remain stayed at

least until final disposition of the

litigation in the Eighth Circuit. In light

of the Stay Order, the Commission did

not submit to OMB the change in

paperwork burden that it estimated in

the Adopting Release with respect to the

above collections of information. The

current OMB inventory for the above

collections of information, therefore,

does not reflect the change in

paperwork burden that the Commission

estimated in the Adopting Release. As a

result, we also do not plan to publish a

notice requesting comment on, or

submitting to OMB for review, any

changes to these collections of

information in connection with the

proposed rescission. Instead, if the

proposed rescission is finalized, the

current OMB inventory with respect to

the above collections of information will

remain accurate, as it will not reflect

any changes as a result of the Final

Rules. If we do not adopt the proposed

rescission and the Stay Order is lifted

and the Final Rules become effective,

then we will submit to OMB the change

in paperwork burden that the

Commission estimated in the Adopting

Release with respect to the above

collections of information.

VI. Initial Regulatory Flexibility Act

Analysis

The Regulatory Flexibility Act

(‘‘RFA’’)

374

requires the Commission, in

promulgating rules under section 553 of

the Administrative Procedure Act, to

consider the impact of those rules on

small entities. We have prepared, and

made available for public comment, this

Initial Regulatory Flexibility Analysis

(‘‘IRFA’’) in accordance with section

603 of the RFA.

375

This IRFA relates to

proposed rescission of the Final Rules,

which is described in section III above.

A. Reasons for, and Objectives of, the

Proposed Action

We are proposing to rescind the Final

Rules in their entirety such that

registrants would not be required to

provide certain climate-related

information in their registration

statements and annual reports,

including certain information about

climate-related financial risks and

certain climate-related financial

statements effects. As noted above, we

are proposing to rescind the Final Rules

because they exceed the scope of the

Commission’s statutory authority. In

addition, we are proposing to rescind

the Final Rules because they are

unnecessary and inconsistent with a

registrant-specific, materiality-based

approach to risk disclosure that best

serves the interests of registrants and

investors; stray from the Commission’s

area of regulatory responsibility; impose

substantial costs on public companies

and their shareholders that are not

justified by the informational benefits

that may provide to some investors; and

are at odds with the Commission’s

policy objectives of facilitating capital

formation and promoting public

company status. The reasons for, and

objectives of, the proposed rescission

are discussed in more detail in section

III.

B. Legal Basis

We are proposing to rescind the Final

Rules under the authority set forth in

sections 7, 10, 19(a), and 28 of the

Securities Act, as amended, and

sections 3(b), 12, 13, 15, 23(a), and 36

of the Exchange Act, as amended.

C. Small Entities Subject to the

Proposed Amendments

The proposed rescission would affect

some issuers that are small entities. The

RFA defines ‘‘small entity’’ to mean

‘‘small business,’’ ‘‘small organization,’’

or ‘‘small governmental

jurisdiction.’’

376

For purposes of the

RFA, under 17 CFR 240.0–10(a), an

issuer, other than an investment

company, is a ‘‘small business’’ or

‘‘small organization’’ if it had total

assets of $5 million or less on the last

day of its most recent fiscal year and,

under 17 CFR 230.157, is also engaged

or proposing to engage in an offering of

securities that does not exceed $5

million.

377

An investment company,

including a business development

company,

378

is considered to be a

‘‘small business’’ if it, together with

other investment companies in the same

group of related investment companies,

has net assets of $50 million or less as

of the end of its most recent fiscal

year.

379

The proposed rescission would

apply to a registrant when filing a

Securities Act or Exchange Act

registration statement or an Exchange

Act annual or other periodic report. We

estimate that there were approximately

707 issuers

380

and 5 business

development companies

381

that may be

considered small entities that would be

subject to the proposed rescission of the

Final Rules.

382

D. Projected Reporting, Recordkeeping,

and Other Compliance Requirements

The proposed rescission would not

impose any reporting, recordkeeping or

other compliance requirements on

registrants, including any small entities.

The proposed rescission would

eliminate any and all reporting,

recordkeeping and other compliance

requirements under the Final Rules. In

the Final Regulatory Flexibility Act

analysis included in the Adopting

Release, the Commission discussed the

economic impact of the Final Rules on

smaller entities, stating that smaller

entities ‘‘may face costs that are

proportionally greater as [they] may be

less able to bear such costs relative to

larger entities’’ but also noting that it is

‘‘difficult to project the economic

impact on small entities with precision’’

given that the impact could vary based

on, among other factors, the nature and

conduct of their businesses.

383

As noted

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33345

Federal Register / Vol. 91, No. 106 / Wednesday, June 3, 2026 / Proposed Rules

384

See discussion supra section IV.D; see also

discussion supra section III.C.4.

385

See Adopting Release at 21910.

386

See supra Table 11.

387

See 5 U.S.C. chapter 8.

388

See 5 U.S.C. 804(2) (defining ‘‘major rule’’).

above, certain of the Final Rules impose

costs that might not scale proportionally

to firm size and thus could impose

relatively greater burdens on smaller

firms, including those with resource

constraints.

384

As such, to the extent the

costs of the Final Rules are generally

fixed across entities, they would be

proportionally more costly for smaller

entities subject to them.

385

Accordingly,

rescinding the Final Rules could result

in cost savings for smaller firms that are

proportionately greater than such

savings for larger firms. We expect the

majority of the estimated 712 small

entities that would be affected by the

proposed rescission to be either an SRC,

an EGC or a NAF. In section IV, we

estimate that the one-time costs savings

per registrant for SRCs, EGCs and NAFs

from the proposed rescission would be

$1,101,780 and the annual cost savings

per such registrant would be $0 in Years

1 to 3 and $732,687 in Years 4 to 10.

386

The proposed rescission is discussed in

detail in section III above. We discuss

the economic impact, including the

estimated reduction in compliance costs

and burdens, of the proposed rescission

in sections IV and V above.

E. Duplicative, Overlapping, or

Conflicting Federal Rules

The proposed rescission does not

duplicate or conflict with other existing

Federal rules.

F. Significant Alternatives

The RFA directs us to consider

alternatives that would accomplish our

stated objectives, while minimizing any

significant economic impact on small

entities. As we are proposing to rescind

the Final Rules in their entirety, we do

not believe there are any alternatives

that would further minimize the

compliance and reporting requirements

of small entities subject to the Final

Rules. Nor is there a need to exempt any

small entities subject to the Final Rules

or provide them with alternative

compliance timetables. The proposed

rescission would mark a return to the

Commission’s generally principles-

based approach to disclosure of climate-

related matters, which uses performance

standards based on the concept of

materiality.

G. Request for Comment

We encourage the submission of

comments with respect to any aspect of

this IRFA. In particular, we request

comments regarding:

•The number of small entities that

may be affected by the proposed

rescission;

•The existence or nature of the

potential impact of the proposed

rescission on small entities discussed in

the analysis;

•How the proposed rescission could

further lower the burden on small

entities; and

•How to quantify the impact of the

proposed rescission.

Commenters are asked to describe the

nature of any impact and provide

empirical data supporting the extent of

the impact. Comments will be

considered in the preparation of the

Final Regulatory Flexibility Analysis, if

the proposed rescission is adopted, and

will be placed in the same public file as

comments on the proposed rescission.

VII. Congressional Review Act

For purposes of Subtitle E of the

Small Business Regulatory Enforcement

Fairness Act of 1996 (also known as the

Congressional Review Act),

387

the

Commission must seek OMB’s

determination as to whether a final

regulation constitutes a ‘‘major rule.’’

Under the Congressional Review Act, a

rule is considered ‘‘major’’ where, if

adopted, it results in or is likely to

result in:

•An annual effect on the economy of

$100 million or more;

•A major increase in costs or prices

for consumers or individual industries;

or

•Significant adverse effects on

competition, investment, or

innovation.

388

To help inform OMB’s determination

as to whether any rescission that results

from the proposal would be a ‘‘major

rule,’’ the Commission solicits comment

and data on:

•The potential effect on the U.S.

economy on an annual basis;

•Any potential increase in costs or

prices for consumers or individual

industries; and

•Any potential effect on competition,

investment, or innovation.

Commenters are requested to provide

empirical data and other factual support

for their views to the extent possible.

VIII. Other Matters

This action is an economically

significant regulatory action under

section 3(f)(1) of Executive Order 12866,

and has been reviewed by OMB. This

action, if finalized as proposed, is

expected to be an Executive Order

14192 deregulatory action.

Statutory Authority

Sections 7, 10, 19(a), and 28 of the

Securities Act, as amended, and

sections 3(b), 12, 13, 15, 23(a), and 36

of the Exchange Act, as amended.

By the Commission.

Dated: May 29, 2026.

Sherry R. Haywood,

Assistant Secretary.

[FR Doc. 2026–11091 Filed 6–2–26; 8:45 am]

BILLING CODE 8011–01–P

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Citation	91 FR 33296
Published date	03 June 2026
FR Document	2026-11091
Pages	33296-33345
Section	Proposed rules
Issuer	Securities and Exchange Commission

Rescission of Climate-Related Disclosure Rules

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