SEC Climate Disclosure Rule
The SEC's climate disclosure rule was adopted in March 2024 to require US public companies to disclose material climate-related risks, Scope 1 and 2 GHG emissions (for large accelerated and accelerated filers), governance, strategy, and climate-related financial impacts. The rule was immediately stayed by federal courts and has never taken effect. In May 2026, the SEC proposed to rescind it entirely.
The SEC's climate disclosure rule would have been the first mandatory US climate reporting requirement for public companies. The final rule, adopted on March 6, 2024, required disclosures in Regulation S-K and Regulation S-X. Regulation S-K covered governance, risk management, strategy, and targets. Regulation S-X covered climate-related financial impacts such as severe weather losses and transition expenditures.
Covered companies would have had to disclose Scope 1 and Scope 2 GHG emissions, with limited assurance for large accelerated and accelerated filers. Scope 3 was not included in the final rule, a significant departure from the 2022 proposal. The rule would have phased in from 2025 to 2028.
Legal challenges began immediately. On March 15, 2024, the US Court of Appeals for the Fifth Circuit stayed the rule. After challenges were consolidated in the Eighth Circuit, the SEC voluntarily stayed the rule on April 4, 2024. In March 2025, the SEC voted to end its defense of the rule. In September 2025, the Eighth Circuit held the consolidated petitions in abeyance so the SEC could reconsider the rule through notice-and-comment rulemaking.
On May 29, 2026, the SEC proposed to rescind the climate disclosure rules in their entirety. The proposal argued the rules exceeded the agency's statutory authority and were unnecessarily burdensome. The public comment period runs through August 2026. The rule remains stayed and is not in effect.
Even if the rule is rescinded, many US companies still face climate reporting requirements from other sources. CSRD covers EU operations, California SB 253 applies to large companies doing business in California, and CDP and investor pressure continue to drive voluntary disclosure. Companies that built GHG inventories and disclosure controls for the SEC rule are well positioned for these other requirements.
Frequently asked questions
What is the SEC climate disclosure rule? +
The SEC climate disclosure rule was adopted in March 2024 to require US public companies to disclose material climate risks, Scope 1 and 2 emissions (for large filers), governance, strategy, and climate-related financial impacts. It has been stayed by courts and was never enforced.
Is the SEC climate disclosure rule still in effect? +
No. The rule was stayed in March and April 2024 and has never taken effect. In May 2026, the SEC proposed to rescind it entirely. The proposal is subject to public comment and further SEC action.
Does the SEC require Scope 3 reporting? +
The final SEC rule did not mandate Scope 3 reporting. The 2026 proposal to rescind the rule would eliminate the entire disclosure program, so no aspect of the rule would take effect unless the SEC adopts a different requirement in the future.
Related terms
Carbon Accounting
Carbon accounting is the systematic process of measuring, recording, and reporting the greenhouse gas (GHG) emissions produced by an organization, product, or activity. It follows standardized methodologies — most commonly the GHG Protocol — to quantify emissions across Scope 1 (direct), Scope 2 (purchased energy), and Scope 3 (value chain) categories, producing an auditable inventory that underpins disclosure, reduction planning, and regulatory compliance.
CSRD (Corporate Sustainability Reporting Directive)
The Corporate Sustainability Reporting Directive (CSRD) is the European Union's mandatory sustainability reporting law. It requires companies operating in the EU above certain thresholds to disclose environmental, social, and governance (ESG) information according to the European Sustainability Reporting Standards (ESRS), with third-party assurance.
California SB 253 (Climate Corporate Data Accountability Act)
SB 253 is a California law requiring companies doing business in the state with annual revenues exceeding $1 billion to report Scope 1, 2, and 3 greenhouse gas emissions annually, beginning with Scope 1 and 2 for reporting year 2026 and Scope 3 for reporting year 2027.
Scope 1 Emissions
Scope 1 emissions are direct greenhouse gas emissions from sources that an organization owns or controls. This includes combustion of fossil fuels in owned boilers, furnaces, and vehicles; process emissions from manufacturing; and fugitive emissions such as refrigerant leaks and methane from owned landfills.
Scope 2 Emissions
Scope 2 emissions are indirect greenhouse gas emissions from the generation of purchased electricity, steam, heating, and cooling consumed by an organization. They are called 'indirect' because the emissions physically occur at the power plant or utility, not at the reporting company's facilities.