Update on U.S. Climate Disclosure Requirements
In early 2025, the climate disclosure requirements in the United States are undergoing significant changes. While the Trump Administration is looking to repeal the federal climate disclosure rule established by the Securities and Exchange Commission (SEC) last year, California is moving ahead with its own set of laws, with other states considering similar legislation. Business entities in the U.S. need to stay abreast of these developments and ensure consistency in reporting across various frameworks, including potential changes to international and voluntary reporting standards.
The SEC’s climate disclosure rule, adopted in March 2024, aimed to standardize climate-related disclosures for public companies. However, legal challenges led to a stay in implementation pending judicial review. Acting SEC Chair Mark Uyeda has since expressed concerns about the rule, citing flaws that could harm the capital markets and the economy. With potential changes on the horizon, the SEC may seek to roll back the rule through a new rulemaking process.
Meanwhile, California has been actively implementing its climate disclosure laws, signed into law by Governor Gavin Newsom in October 2023. These laws mandate greenhouse gas emissions disclosure and climate-related risk disclosures for companies doing business in California, regardless of their public or private status. Amendments to these laws in September 2024 delayed certain deadlines but maintained compliance timelines for covered entities. California’s Air Resources Board is seeking input from stakeholders to define compliance obligations under the laws.
While legal challenges to California’s laws have faced setbacks in court, other states like New York, Illinois, and Washington have considered similar climate disclosure legislation. These bills, like California’s laws, aim to ensure transparency and accountability in reporting on climate-related metrics. This trend towards increased climate disclosure requirements extends beyond state borders, with the European Union also implementing stricter reporting standards through the Corporate Sustainability Reporting Directive (CSRD).
As regulatory landscapes continue to evolve, companies operating in the U.S. must adapt their data collection and reporting processes to meet various disclosure requirements. Staying informed about changes at the state and international levels is crucial as businesses navigate the complexities of compliance across different frameworks. The Hunton team is closely monitoring these developments and providing support to clients in updating their compliance plans as needed.
