SEC Withdraws Defense of Rules Requiring Disclosure of Climate Change

The Securities and Exchange Commission (SEC) recently made a significant decision to no longer support its controversial climate change disclosure regulations. This move marks a triumph for the Liberty Justice Center and its supporters, following a legal challenge filed by the Liberty Justice Center and the Pelican Institute. The challenge argued that the rules imposed by the SEC went against the First Amendment and exceeded the SEC’s jurisdiction.

The legal action was initiated in March 2024 on behalf of the National Legal and Policy Center and the Oil and Gas Workers Association. The focus was on the SEC’s regulations that mandated extensive new disclosure obligations for companies regarding climate change. Critics contended that these requirements compelled businesses to reveal information that was unrelated to the SEC’s fundamental role of overseeing securities and safeguarding investors.

In a letter submitted to the U.S. Court of Appeals for the Eighth Circuit, the SEC declared its decision to retract its defense of the rules and forgo oral arguments. The letter, signed by SEC counsel, stated that a majority of the current Commissioners disapproved of the rules, prompting the Commission to abandon its legal stance.

The lawsuit contended that the regulations violated the First Amendment by coercing companies to communicate on climate-related matters, and that the SEC had overstepped its boundaries since the regulations were not explicitly endorsed by Congress.

In February 2025, the SEC’s Acting Chairman publicized that most of the current Commissioners were against the rules, leading to the Commission’s choice to rescind its defense.

Jacob Huebert, President of the Liberty Justice Center, emphasized, “These illicit regulations should never have been put in place. They are designed to compel companies to promote a particular agenda, rather than fulfilling the SEC’s role of regulating securities and safeguarding investors. The SEC is making the right move by abandoning its defense of these unjustifiable regulations.”

Sarah Harbison, General Counsel at the Pelican Institute, added, “The SEC attempted to require companies to communicate in a manner that aligned with the government’s agenda, rather than focusing on their business objectives. This not only represents poor policy but also violates the Constitution. We take pride in standing up for the protection of the First Amendment.”