SEC Climate Disclosure Rule

Status, September 2026: The SEC's climate disclosure rules never took effect. The SEC stayed them in April 2024, voted in March 2025 to stop defending them in court, and in 2026 proposed rescinding them entirely (comments closed August 3, 2026). The Eighth Circuit is holding the litigation in abeyance. The rest of this page describes the rules as adopted. Source: SEC.

What Is the SEC Climate Disclosure Rule?

The Securities and Exchange Commission adopted its final climate-related disclosure rule in March 2024, establishing mandatory climate disclosure requirements for US publicly traded companies. The rule requires registrants to disclose climate-related risks, governance, strategy, targets, and greenhouse gas emissions in annual reports and registration statements.

The rule would have been the most significant expansion of SEC disclosure requirements in decades, bringing climate information into the regulated financial reporting framework for the first time.

Who It Applies To

The rule applies to all SEC registrants (companies that file with the SEC), with phased implementation based on filer status:

• Large accelerated filers (public float >$700M): First phase
• Accelerated filers (public float $75M-$700M): Second phase
• Non-accelerated filers and smaller reporting companies: Third phase, with reduced requirements

Foreign private issuers that file with the SEC are also covered.

Key Requirements

Governance: Describe board oversight of climate-related risks and management's role in assessing and managing them.

Strategy: Disclose climate-related risks that have materially impacted or are reasonably likely to materially impact the company's business, strategy, or financial condition. This includes:

• Description of material climate risks (physical and transition)
• Actual and potential material impacts on strategy, business model, and outlook
• Climate scenario analysis (if used)
• Transition plans (if adopted)

Risk management: Describe processes for identifying, assessing, and managing material climate-related risks, and how they integrate with overall risk management.

GHG emissions: Disclose:

• Scope 1 and Scope 2 emissions, if material, from large accelerated and accelerated filers only, with third-party assurance phased in
• Scope 3 emissions are not required: the SEC dropped the Scope 3 requirement it had proposed in 2022
• Methodology and assumptions

Financial statement impacts: Disclose, in a note to the audited financial statements, costs and losses from severe weather events and other natural conditions (above 1% and de minimis thresholds) and costs of carbon offsets and renewable energy credits used as a material part of climate targets. Material spending to mitigate climate risks is disclosed outside the financial statements.

Timeline

The rule never took effect:

• March 2024: Rule adopted by SEC
• April 2024: SEC voluntarily stayed implementation pending Eighth Circuit review
• March 2025: SEC voted to stop defending the rule in court
• September 2025: Eighth Circuit ordered the case held in abeyance until the SEC either reconsiders the rule or renews its defense
• May 2026: SEC proposed rescinding the rule entirely
• As adopted, compliance would have started with fiscal years beginning in 2025 for large accelerated filers, 2026 for accelerated filers and 2027 for all other registrants. None of these dates took effect.

No company has to comply with the rule. For large companies doing business in California, SB 253 now requires emissions reporting, with the first Scope 1 and 2 reports due November 10, 2026.

Compliance Steps

Because the rule never took effect, the SEC does not require any of these steps. They describe what compliance would have involved, and most of them also apply to California's SB 253 and the EU's CSRD.

1. Assess current state: Review existing climate disclosures, data systems, and governance
2. Governance structure: Ensure board and management roles in climate oversight are clearly defined and documented
3. GHG inventory: Build or enhance Scope 1, 2, and 3 measurement capabilities using GHG Protocol
4. Risk assessment: Conduct TCFD-aligned climate risk assessment covering physical and transition risks
5. Financial impact analysis: Quantify climate-related financial impacts for the notes to financial statements
6. Internal controls: Establish disclosure controls and procedures for climate information (similar rigor to financial reporting)
7. Attestation preparation: For large filers, engage an attestation provider for GHG emissions data
8. Integration with 10-K: Prepare climate disclosures for inclusion in annual report filings

Penalties

Had the rule taken effect, non-compliance would have carried standard securities enforcement mechanisms:

• SEC enforcement actions
• Civil monetary penalties
• Restatement requirements
• Officer and director liability
• Shareholder litigation risk
• Securities fraud exposure for material misstatements

How Council Fire Can Help

Council Fire helps public companies prepare for the climate disclosure requirements that do apply to them — from GHG inventory development and climate risk assessment through disclosure drafting and attestation readiness. Contact us for climate disclosure support.