At every level of government, greenhouse gas (GHG) emissions disclosure regulations that saw meaningful progress only a few years ago are now in retreat. Last week, the Securities and Exchange Commission (SEC) proposed rescinding its 2024 corporate climate-disclosure rule, and New York Governor Kathy Hochul persuaded legislators to weaken the state’s landmark climate law, the Climate Leadership and Community Protection Act (CLCPA), a decision that will also compromise New York’s Mandatory Greenhouse Gas Reporting regulations.
Meanwhile, the Environmental Protection Agency’s (EPA) proposed repeal of its Greenhouse Gas Reporting Program (GHGRP) remains pending. And across the Atlantic, the European Union (EU) adopted in February final text for its Directive (EU) 2026/470, the “Omnibus I” simplification package, raising coverage thresholds for the Corporate Sustainability Reporting Directive (CSRD) and limiting the reach of the Corporate Sustainability Due Diligence Directive (CSDDD). This Omnibus package may reduce by 90% the number of corporations operating under both directives.
The only notable advance in recent months occurred in California, where the California Air Resources Board (CARB) adopted initial implementing regulations for corporate GHG emissions disclosures under state law SB 253—though a First Amendment challenge argued before the Ninth Circuit in January remains pending. All told, U.S. investors and policymakers could end 2026 entitled to even less emissions data than before momentum toward comprehensive disclosure regimes began.
Federal Corporate Climate Disclosures
After more than a year of procedural maneuvers, on May 29 the SEC formally proposed rescinding its 2024 climate-disclosure rule, which required covered corporations to disclose their material climate risks, as well as material Scope 1 and 2 GHG emissions. This followed a court filing on May 7 by the SEC, notifying the Eighth Circuit (which has held in abeyance litigation challenging the 2024 rule, Iowa v. SEC) that it intended to rescind the rule, emphasizing that the resulting regulatory provisions “exceed the Commission’s statutory authority” and that “the costs…outweigh their benefits.” The recission process will be governed by Section 553 of the Administrative Procedure Act (APA). After a 60-day comment period, the SEC must consider and respond to substantive comments before finalizing its rescission. Any finalized rescission will almost certainly be challenged in court by investors, states, and/or NGOs seeking to preserve the 2024 rule.
Notably, the SEC’s current position implies that information covered by the 2024 rule is not material to investors. But a rescission premised on the SEC’s present determination that this rule is “not necessary to protect investors” or that climate-related disclosures “may even serve to harm investors” (by providing excess information) could be difficult to defend, particularly given the depth of demonstrated investor demand for this information. Indeed, in 2024, the SEC built its rationale for adopting the rule around the concept of materiality. The SEC tied required disclosures of severe-weather expenditures, climate-transition risks, and Scope 1 and 2 emissions to traditional materiality thresholds, for information that a reasonable investor would consider important in making an investment or shareholder voting decision—in accordance with standards articulated by the Supreme Court in TSC Industries v. Northway (1976), and affirmed in Matrixx Initiatives v. Siracusano (2011).
By contrast, the SEC’s rescission proposal now asserts that investor demand for climate-related risk information does not sufficiently illustrate legal materiality, and that these materiality qualifiers would “not salvage [the rule’s] legal defects” anyway given their associated costs. Indeed, the SEC takes pains to justify its rescission in statutory-authority and cost-benefit terms, perhaps seeking more defensible grounds. It further asserts that, to the extent climate change or transition risk materially affects a public corporation’s operations or financial performance, the SEC’s 2010 Guidance Regarding Disclosure Related to Climate Change already requires discussion of those effects.
Much of the SEC’s statutory authority stems from the 1933 and 1934 securities acts. In its rescission proposal, the SEC asserts that any new disclosure requirements must be “comparable” to the business or financial disclosures “recited in those statutes” and “specified by Congress.” Needless to say, this legislation from nearly a century ago does not expressly authorize climate risk disclosures. However, neither do these acts’ disclosure provisions expressly authorize numerous other material data-points in modern financial markets. The SEC’s assertion now of its own limited authority suggests those other disclosure requirements could also be unwound or face legal challenge. For related reasons, the SEC’s invocation of the major questions doctrine, embraced by the Supreme Court in West Virginia v. EPA (2022), to argue that the climate rule is too politically controversial to fall within SEC authority will be heavily contested.
The SEC also argues that the rule’s “significant costs” provide a separate basis for rescinding it. Balancing the costs and benefits of a given regulation involves complex calculations and expert input, particularly in light of the shifting landscape of overlapping international, national, and state-level disclosure regimes that can lessen the burden of any given reporting requirement. This analysis must further take account of accumulating research on those regimes, which suggests that regulations like the SEC’s 2024 rule can provide net economic benefits, for example by providing more accurate market pricing of real-world climate risk.
This proposed rescission fits within a broader SEC retreat from robust corporate disclosures. The Commission has proposed moving public-company reporting from quarterly to semi-annual timeframes, has pursued rolling back multiple components from Reg S-K (which covers certain narrative reporting obligations under the U.S. securities acts), and has made it easier for firms to exclude shareholder proposals from proxy ballots and thus to curb challenging corporate-level discussions. At the same time, other federal agencies under the second Trump Administration have sought to further constrain corporate conversations on climate risk, for instance with the Federal Trade Commission initiating antitrust investigations of proxy advisors ISS and Glass Lewis, in part for steering clients toward climate risk analysis.
State Corporate Climate Disclosures
California’s climate-reporting regime, once widely expected to backstop the SEC’s retreat on corporate disclosures, has itself been challenged in litigation, and is now partially enjoined. On November 18, 2025, the Ninth Circuit issued a preliminary injunction blocking enforcement of SB 261 (requiring climate financial-risk reporting), while declining to enjoin SB 253 (requiring GHG emissions reporting). An oral argument on January 9 has not yet produced a merits ruling on the Chamber of Commerce’s contention that even quantitative emissions-reporting requirements under SB 253 amount to compelled speech in violation of the First Amendment. Similar to the potential implications of the SEC’s circumscription of its own authority, an invalidation of California’s climate-disclosure laws on First Amendment grounds could threaten longstanding corporate-disclosure requirements well beyond climate concerns.
Despite the ongoing litigation, CARB adopted initial implementation regulations for SB 253 on February 26, setting an August 10, 2026 deadline for Scope 1 and 2 reporting. CARB reserved Scope 3 reporting mechanics for a separate rulemaking later this year. In one significant diminishment of SB 253’s scope, CARB excluded insurers from reporting obligations.
Other states have also stepped into the corporate-reporting breach. New York’s Climate Corporate Data Accountability Act (S3456), passed by the state Senate on February 10, and now pending in the Assembly, closely mirrors California’s SB 253. The bill would require companies with more than $1 billion in revenue and doing business in New York to report Scope 1 and 2 emissions beginning July 1, 2027 (covering fiscal year 2026), and Scope 3 emissions beginning December 31, 2027. It orders the state’s Department of Environmental Conservation (DEC) to adopt implementing regulations by this year’s end.
State bills in New Jersey (pending), Illinois (pending), and Washington (stalled) have pursued overlapping, though not identical, disclosure requirements. Ironically, while opponents of the SEC’s climate-disclosure rule have called for rescission in part due to its compliance burdens, a patchwork of state regulations may ultimately impose greater administrative complexities and costs than the uniform federal regime now being unwound.
Federal Facility-Specific Disclosures
The retreat on company-wide emissions disclosures parallels a consequential rollback at the facility level. On September 16, 2025, the EPA proposed to repeal its GHGRP obligations for 46 of 47 source categories, and to suspend its remaining subpart W obligations (for petroleum and natural gas systems) until 2034.
The GHGRP has many limitations. For example, its 25,000-ton threshold encourages program leakage, with corporations transferring emissions-intensive production to smaller facilities. But for over fifteen years, the GHGRP has maintained some degree of consistent, verified, facility-level GHG emissions data for 85% to 90% of national emissions. While we have cautioned against overreliance on emissions disclosures as standalone policy tools, evidence does suggest that rigorous reporting regimes (in particular, mandatory, quantitative, and uniform disclosure requirements that facilitate ongoing public engagement) can lead to meaningful emissions reductions. Moreover, state-level reporting rules, federal tax-credit eligibility determinations, and corporate Scope 1 and 2 calculations make use of the GHGRP’s procedural frameworks and its generated data. EPA repeal of the program could thus destabilize a much broader emissions-disclosure architecture.
State Facility-Specific Disclosures
Here as well, states have begun to fill the gap. New York’s DEC promulgated a Mandatory Greenhouse Gas Reporting rule, covering in-state facilities as well as out-of-state energy suppliers emitting 10,000 annual tons of GHGs, effective December 25, 2025, with first reports due June 1, 2027. Massachusetts, New Jersey, Washington, and several other states have implemented or advanced analogous facility-level reporting programs.
But already this spring, two lawsuits have challenged New York’s reporting rule. In a state-court complaint filed on April 9, the American Petroleum Institute argues that the rule exceeds DEC’s authority under the CLCPA, and that several specific provisions conflict with the underlying legislative framework. In a separate federal-court case, Iowa v. James, filed on May 14, attorneys general of Iowa and Missouri, along with the American Free Enterprise Chamber of Commerce, advance constitutional dormant commerce clause claims that New York’s requirements on upstream out-of-state energy suppliers to register with DEC, develop monitoring and reporting infrastructure, and retain third-party verifiers, impermissibly project New York’s regulatory authority across state lines. Plaintiffs also assert constitutional preemption and due process claims.
The dormant commerce clause claim in Iowa v. James echoes the Chamber of Commerce’s initial challenge to California’s SB 253 and SB 261. Both sets of plaintiffs questioned whether a state may require companies operating in that state to report nation-wide climate disclosures. The California plaintiffs’ dormant commerce clause claims have since been dismissed (they now rely solely on a First Amendment claim, framing GHG-reporting mandates as compelled speech on a contested topic). The Iowa v. James plaintiffs may similarly struggle with their extraterritoriality claim, given that the Supreme Court in National Pork Producers Council v. Ross (2023) upheld state-level public-health restrictions that significantly impacted out-of-state economic activity. More generally, however, this developing field of litigation suggests that constitutional questions facing state-level disclosure regimes may proliferate as states adopt their own variants in the absence of uniform national standards.
For one further wrinkle, New York’s reporting program rests on a statutory foundation that the state itself is now undermining. On March 20, Governor Hochul proposed amendments to the CLCPA. Subsequent political horse-trading led, among other changes, to disclosure exemptions for previously covered out-of-state fuel suppliers’ upstream emissions (while retaining coverage for out-of-state electricity suppliers), and for emissions from biogenic-combustion via wood, crops, or biogas (still to be reported, but now “separately” from the Mandatory Greenhouse Gas Reporting program). These amendments, finalized and approved on May 27, will narrow the Mandatory Greenhouse Gas Reporting program’s coverage scope and its range of reporting metrics.
Conclusion
The current moment threatens to yield a barren U.S. emissions-disclosure landscape. The SEC appears prepared not just to rescind its climate-disclosure rule, but to constrain its own authority to take future action on related topics. At the same time, the EPA has proposed dismantling its longstanding facility-level reporting regime. California’s state-level disclosure regime is partially enjoined and continues to face legal challenges. New York’s emissions-reporting program faces challenges on both statutory and constitutional grounds.
It is worth noting that these disclosure rollbacks appear to be motivated by shifting political winds as much as by poised legal determinations. Most conspicuously, the SEC is operating at present with only three Commissioners, all Republicans. By statute, no more than three of the SEC’s five allotted Commissioners may belong to the same political party. This structural design enhances institutional credibility for significant rulemakings. But the two default Democratic seats remain vacant, and the Trump administration has not put forward nominees to fill them. The climate-disclosure rule’s rescission may thus generate a pronounced credibility problem for the SEC, even if not a fatal legal defect.
Simultaneously, Democratic governors, state regulators, and state legislators now tread a narrow path in presenting themselves as leaders in responding to the climate crisis, while stepping away from bold commitments they made just several years prior—including California’s coverage of insurers, and New York’s coverage of out-of-state fuel suppliers. As emissions-disclosure programs face significant headwinds, their advocates need to devise nimble forms of renewed political engagement alongside effective legal strategies.
Cynthia Hanawalt is the Director of Climate and Business Law at the Sabin Center for Climate Change Law.
Andy Fitch is a Climate and Business Law Fellow at the Sabin Center for Climate Change Law at Columbia Law School.
