SEC Remains Silent on Enforcement of Climate Disclosure Regulation, Regardless of Court Outcome
The SEC's climate disclosure rule, currently stayed and unenforced, is awaiting a decision from the U.S. Court of Appeals for the Eighth Circuit [1][2][3]. The Rule, aimed at improving climate-related disclosures by publicly traded companies, has been the subject of ongoing litigation and internal debate within the SEC.
In a recent status report filed in July 2025, the SEC stated that it does not intend to review or rescind the rules at this time but requested the court to proceed with deciding the case [1][3]. However, the agency has declined to commit to enforcing the rules if the Court upholds them, leaving enforcement uncertain for now [1].
Commissioner Caroline Crenshaw, a vocal critic of the SEC's approach, has publicly criticized the agency's response after the status report was filed. While specific details of her critique are limited, her opposition underscores the division within the Commission on the rules and their future enforcement [1].
Crenshaw has accused the SEC of avoiding its obligations under the Administrative Procedure Act and stated that the SEC is hoping the court will rescind the climate disclosure rule instead of following formal rulemaking [1]. She also pointed out that the SEC did not answer a question posed by the court regarding adherence to the rules if the petitions for review are denied [1].
Three of the four current Commissioners have been vocal critics of the climate disclosure rules, and they have withdrawn the Commission from the defense of the rules in litigation [1]. This withdrawal has raised concerns about the SEC's commitment to the rule and its future enforcement.
Crenshaw has warned that the Commission's approach undermines both the judicial process and public trust [1]. She emphasized that any future action on reconsidering, modifying, or rescinding the rules would depend on the Court's decision and subsequent internal Commission deliberations [1][3].
In summary, the future of the SEC's climate disclosure rule hinges heavily on the Eighth Circuit's forthcoming decision. If upheld, enforcement and potential rule modifications will be reconsidered by the Commission. If overturned, the SEC will likely have diminished authority for similar climate-related regulations. The litigation remains paused until the Court acts on the SEC’s status report, and Commissioner Crenshaw’s opposition signals ongoing internal debate [1][2][3].
[1] Source: SEC Filing, July 2025 [2] Source: Crenshaw's Public Statement, July 2025 [3] Source: Court of Appeals for the Eighth Circuit Docket, July 2025
- The ongoing court case at the U.S. Court of Appeals for the Eighth Circuit has crucial implications for the future governance of climate disclosures in finance and business, as it will determine whether the SEC's current climate disclosure rule remains enforced or gets rescinded.
- The internal politics within the SEC, demonstrated by Commissioner Caroline Crenshaw's vocal criticism and the withdrawal of three Commissioners from defending the climate disclosure rule, are adding to the uncertainty surrounding the rule's enforcement and potential modifications.
