SEC Requests Oral Argument Not to Be Scheduled in the Litigation Challenging the Climate-Related Disclosures Rule

In early March 2024, the U.S. Securities and Exchange Commission (“SEC”) finalized its climate-related disclosures rule (The Enhancement and Standardization of Climate-Related Disclosures for Investors) (the “Final Rule”). The Final Rule was immediately challenged and, on March 21, 2024, the Judicial Panel on Multidistrict Litigation randomly selected the U.S. Court of Appeals for the Eighth Circuit as the venue in which the consolidated appeals would be litigated. Shortly thereafter, the SEC issued an order administratively staying the effectiveness of the Final Rule pending completion of the various challenges.

With the change in presidential administration, it was anticipated by many that the SEC would repeal, revoke, or amend the Final Rule, especially following changes in the composition of the SEC. On February 11, 2025, Acting Chairman Mark T. Uyeda released a statement announcing his request that the Eighth Circuit hold off on scheduling oral argument in the consolidated appeals to allow the SEC time “to deliberate and determine the appropriate next steps.” In his statement, Acting Chairman Uyeda called the Final Rule “deeply flawed” with the potential to “inflict significant harm on the capital markets and our economy.”

Both Acting Chairman Uyeda and Commissioner Hester Peirce opposed the Final Rule’s adoption, with the latter noting the sufficiency of the then-existing disclosure rules. In his statement, Acting Chairman Uyeda reiterated his original opposition to the Final Rule, including his earlier statement that the SEC is “without statutory authority or expertise” to address climate change issues. Acting Chairman Uyeda cited this view as one reason why argument in the litigation should not be scheduled at this time. Acting Chairman Uyeda also asserts the recent Presidential Memorandum ordering a regulatory freeze as bearing on the conduct of the litigation, alongside the change in the composition of the Commission.

Acting Chairman Uyeda advised that the SEC will “promptly notify” the Eighth Circuit regarding what its position is with respect to the ongoing litigation. While the future of the Final Rule is uncertain, for registrants that may also find themselves subject to other impending climate-related regulatory requirements, such as under the EU’s CSRD or California’s climate disclosure laws, active preparation may be necessary no matter the ultimate fate of the Final Rule.

We will continue monitoring this case and developments with respect to climate disclosure requirements generally. Please reach out to your Vinson & Elkins team to discuss these matters and their implications for your business.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.