Companies likely to stick with climate disclosure despite SEC rule’s demise

The Securities and Exchange Commission announced moves this week that will likely end the short-lived SEC rule that would have required companies to disclose information about their climate risks and greenhouse gas emissions.

On Tuesday, acting SEC Chair Mark Uyeda indicated to a court hearing a legal challenge to the rule that the SEC will not defend it, setting the stage for the rule’s removal under new leadership.

It’s a quiet end to a rule that caused quite a bit of noise in its short span. When first proposed by former SEC Chair Gary Gensler in 2022, the rule became the most commented upon in SEC history, with some 24,000 individual comments.

The SEC’s attempt at a compromise appeased no one and triggered lawsuits by both the climate left, who wanted the rule to go further, and the business right, who argued it was too burdensome.

In the end, the climate disclosure rule will end not with a courtroom bang but with a procedural whimper. Gensler resigned January 20, effectively sealing the fate of the climate disclosure rule under the new chair to be appointed by Trump.

“Under this new SEC leadership, there’s really no support for that rule,” Workiva Vice President and Industry Principal Steve Soter told Newsweek. Workiva provides financial reporting data technology to businesses.

Soter said companies that had been preparing to meet the rule’s requirements could see the writing on the wall, with Donald Trump’s election victory marking a reversal from the climate action under President Joe Biden.

And yet, a survey Workiva conducted after the election shows most companies are still planning on disclosing their emissions and climate risk information anyway.

Workiva surveyed 1,601 global business leaders for its 2025 Executive Benchmark Survey and 85 percent of them said they will move forward with their climate disclosure plans despite political shifts and other pushback against disclosure requirements.

The findings are consistent with other recent surveys of business leaders and investors showing little change in their plans for climate-related financial reporting.

So, what’s leading these executives to stay the climate course? Soter said it comes down to three factors: Europe’s regulations on climate disclosure, state-level rules in the U.S. and the basic business value that comes from the assessment of climate risks.

The Corporate Sustainability Reporting Directive, or CSRD, is now in effect in the EU requiring sustainability and climate-related disclosure from large companies based in or with a subsidiary in the EU.

That rule has also faced some political pushback both from within some EU countries and the U.S.

Trump’s nominee to lead the Commerce Department, Howard Lutnick, said during his confirmation hearing last month that he was concerned about EU rules.

In written responses to questions from the Senate Commerce Committee, Lutnick said he would “consider using all available trade tools at our disposal, as appropriate, to respond to EU regulations that harm the American economy and impose unreasonable burdens on our companies.”

But Soter said that while there might be some modifications to the EU rules, he does not think they are likely to be repealed.

“I certainly wouldn’t expect the EU to capitulate to pressure from the U.S.,” he said.

Large companies doing business in California will also have to comply with that state’s Climate Accountability Package approved in 2023, which requires companies to disclose their emissions and report on climate-related risk.

As the SEC climate rule began to lose steam, some other states started to copy California’s effort, Soter said, including Illinois, New York and Washington.

“I think that created a vacuum and then of course states have gone to fill that void,” he said. “Companies who weren’t in favor of the SEC rule might now even be facing a more difficult challenge, which is potentially navigating a patchwork of state requirements.”

Finally, Soter said, companies are getting business benefits from their climate-related disclosure. The survey results show 97 percent of executives said sustainability reporting will be a business advantage within two years. Among investors, 96 percent say disclosure strengthens a company’s financial performance and helps identify performance gaps.

“Sustainability reporting, and particularly climate, is adding value—it is helping us operate better, and it is driving more attractive capital,” Soter said of the company attitude reflected in the survey results. “So, yeah, we’re going to keep focusing on it.”