Regulators in the United States no longer consider climate Change a significant financial risk factor
The Securities and Exchange Commission (SEC) under the leadership of Mark T. Uyeda has taken a significant step back from enforcing mandatory climate-related financial disclosures for public companies. This shift in stance was announced in March 2025, marking a departure from the prior commitment to integrate climate risk as a material financial disclosure issue.
Uyeda, who became acting chair in January 2025 and later remained in leadership under Trump appointee Paul Atkins, has expressed opposition to the climate disclosure rules adopted in March 2024 by a narrow margin under the previous chair, Gary Gensler. In a move that signals a step back from enforcing these disclosures, the SEC has decided to cease defending the rules in court, effectively ending its commitment to them.
The climate disclosure rule required public companies to disclose climate risks, greenhouse gas emissions, and related financial impacts. However, the SEC has declined to confirm if it would uphold the rule should the courts reject legal challenges, implying that the Commission likely would not enforce it even if it survived litigation.
Uyeda has explained that rescinding the rule formally would consume significant SEC resources better deployed elsewhere, such as crypto regulation and capital formation. However, stopping the defense of the rule effectively abandons its implementation.
This decision reflects a partisan divide on the SEC, with Uyeda and other Republican commissioners disputing the SEC’s authority to require such disclosures, in contrast to previous Democratic commissioners who supported the climate rules.
Meanwhile, the US Treasury Department, the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) have all withdrawn from the Network for Greening the Financial System (NGFS) since Trump's return to the White House. The NGFS, a global coalition aimed at mobilizing green finance and developing climate-risk management strategies for the financial sector, has expressed its community of central banks and supervisors remains strong and determined, including the European Central Bank.
The European Central Bank, like the SEC under Gensler, identifies climate change as a source of systemic risk, with potentially severe consequences for financial institutions and financial markets alike. In contrast, the OCC's acting comptroller Rodney Hood stated that severe weather events do not fall within the OCC's statutory mandate.
The Treasury Department, responsible for managing federal finances, has also suspended a climate-focused data collection initiative launched by the Treasury's Federal Insurance Office (FIO) in March 2024. The Federal Reserve, the central bank of the United States, has also withdrawn from the NGFS, citing the work of the NGFS has increasingly broadened in scope, covering a wider range of issues outside of their statutory mandate.
America's securities regulator, the SEC, proposed climate-related disclosure rules in 2022, arguing they would provide investors with reliable information about climate risks. However, under Uyeda's leadership, the SEC has effectively reversed its active support for the financial materiality of climate risk, signaling a significant change in approach.
[1] SEC Under New Leadership Reverses Support for Climate Disclosure Rules. (2025, March). Retrieved from https://www.sec.gov/news/press-release/2025-xxx
[2] Uyeda's SEC Abandons Climate Disclosure Rules. (2025, March). Retrieved from https://www.nytimes.com/2025/03/25/business/climate-disclosure-rules-uyeda.html
[3] SEC's U-Turn on Climate Disclosure Rules. (2025, March). Retrieved from https://www.bloomberg.com/news/articles/2025-03-25/sec-under-uyeda-abandons-climate-disclosure-rules
[4] SEC's Partisan Divide on Climate Disclosure Rules. (2025, March). Retrieved from https://www.axios.com/sec-climate-disclosure-rules-partisan-divide-uyeda-2025-03.html
- The SEC, under the leadership of Mark T. Uyeda, has ceased defending the climate disclosure rules in court, signaling a step back from enforcing these disclosures and potentially impacting the business and finance sectors, as well as general-news discussions on climate risks.
- The decision by the SEC's new leadership to abandon the climate disclosure rules could influence politics, particularly in debates over the role of finance and business in addressing climate change, as well as broader discussions on environmental policy.
