Trump’s SEC Moves to Repeal Climate Change Regulations
On Friday, President Trump’s top financial regulators took steps to eliminate significant climate change regulations established during the Biden administration. These rules mandated U.S. companies to disclose their greenhouse gas emissions and potential risks associated with global warming.
Securities and Exchange Commission (SEC) Chairman Paul Atkins criticized these disclosure regulations, labeling them as bureaucratic obstacles that go “beyond our authority” and hinder growth. He emphasized the need to let the Environmental Protection Agency handle such issues, framing the move as a part of Trump’s deregulatory agenda with the promise to “make IPOs great again.”
The 68-year-old attorney argued that the SEC’s regulations should only be imposed when the benefits clearly outweigh the costs and burdens on companies. According to Atkins, the approach taken by Biden’s administration imposes “significant costs on public companies and shareholders that cannot be justified by the information benefits.”
This rule, which was formulated under Biden’s SEC Chairman Gary Gensler, never went into effect due to numerous lawsuits from the U.S. Chamber of Commerce and a coalition of 25 Republican attorneys general freezing the policy in 2024.
Iowa Attorney General Brenna Byrd has been particularly vocal about repealing the regulation, having filed multiple legal challenges against it. She characterized the Biden-era climate mandates as an extreme overreach, expressing gratitude for the SEC’s decision to halt them.
If approved, this repeal, which could occur within the year, would be a significant win for American businesses—especially banks, airlines, oil companies, farmers, and retailers—who opposed additional regulatory burdens.
Under the original rule, publicly traded companies would have had to alert investors to major climate threats, such as floods and wildfires. For instance, hotel chains would have needed to disclose risks associated with rising sea levels impacting their seaside properties. While large companies would have had to report their emissions, this requirement was only applicable if they deemed the figures material for public investors.
Earlier drafts of the regulations had proposed even more extensive disclosures, requiring companies to account for emissions related to both customers and suppliers. This part of the rule was considerably toned down following backlash from industry and investors.
The emphasis on climate-related reporting is part of what has become known as ESG—Environment, Social, and Governance. This movement advocates for climate action, gender diversity, and workplace improvements, making it a contentious issue in the upcoming 2024 presidential campaign among Republicans.
While the SEC’s announcement effectively discards these climate disclosure rules, American companies are still not entirely free from regulatory requirements concerning climate. California, for example, has established its own stringent reporting laws. Companies operating there must report their greenhouse gas emissions, with the first deadline approaching on August 10.
This situation places additional pressures on U.S. companies since 41 other countries around the globe have similar regulations in place, covering around 60% of the global economy. Therefore, many American companies will still grapple with disclosure challenges, especially when engaging in business overseas or in California.
The SEC is currently inviting public comments for 60 days before finalizing Atkins’ proposed revocation. Although the SEC operates independently of the White House, its actions resonate with the broader initiative of the Trump administration to diminish regulations perceived as burdensome for American businesses.
