SEC Makes Another U-Turn – This Time on Climate Rules

Why it matters. The expansive climate disclosure rules were controversial when issued (first disclosures occurring for large companies for FYE2025), and there was a reasonable chance that they would have been struck down by the courts. Still, the reversal is the latest example of how even the SEC now flip flops when the White House changes hands, increasing uncertainty, and leaving companies unsure whether today’s compliance requirements will be tomorrow’s discarded policies. 
 
And the rule could be revived again down the road if the White House flips in the next election. 
 
An increasingly partisan agency. The SEC’s final climate disclosure rules were passed along party lines. Democratic Commissioner Caroline Crenshaw, who voted in favor of adopting the rules, dissented from the decision to walk away stating that the vote was unlawful because it circumvented the procedures for rescinding rules. “One symptom of a much larger problem” as the agency has sought to unwind several Biden-era policies in recent weeks, most recently with Schedule 13D. 
 
What’s next? Paul Atkins, President Trump’s nominee for SEC Chair met before the Senate Banking Committee in a confirmation hearing this week. While he is expected to be confirmed, Atkins faced criticism about potential conflicts of interest with his ties to Wall Street while others on the transition team have reported that Atkins is fully complying with all rules of the SEC’s Office of Government Ethics. 
 
Atkins’ agenda. He is expected to continue a softer approach to disclosure than we have seen under his predecessor, Gary Gensler and make cryptocurrency policies a top priority.