SEC Climate Disclosure Rule Heads for Rescission as California’s Reporting Deadline Arrives

Last updated: August 27, 2026

The SEC climate disclosure rule is heading toward a formal end, even as California moves in the opposite direction. The public comment period on the SEC’s proposal to fully rescind its 2024 climate disclosure rules closed on August 3, 2026, and boards are now waiting on a final rescission while California’s own emissions-reporting law reached its first real compliance milestone just days earlier, on August 10, 2026. The result is a patchwork that governance and investor-relations teams cannot navigate by simply following federal guidance anymore.

What Is Happening to the SEC’s Climate Disclosure Rule?

The SEC has proposed to completely rescind the climate-related disclosure rules it adopted in 2024, which would eliminate the detailed reporting requirements for climate risks, greenhouse gas emissions, and climate governance that the rule had added to Regulation S-K and S-X.

The rescission proposal was issued May 29, 2026, with the comment period closing August 3, 2026. The SEC’s stated justification rests on three arguments: that the 2024 rule exceeded the agency’s statutory authority by prioritizing broader policy objectives over investor materiality; that compliance costs were unjustifiably high, forcing companies to build new data-collection and third-party verification systems; and that the rule’s prescriptive, one-size-fits-all approach departed from the SEC’s traditional, principles-based disclosure philosophy. If the rescission is finalized, companies would fall back on their general obligation to disclose material climate information under existing securities law, without the specific line-item requirements the 2024 rule had added.

Was the rule ever actually in effect?

Not fully. The rule was already suspended before this rescission proposal: a federal appeals court stayed it in September 2025 after the SEC itself asked to pause the litigation defending it, and the rule has not appeared on the agency’s regulatory agenda since. SEC Chair Paul Atkins has separately signaled a broader push to scale back disclosure burdens tied to public-company status, a stance consistent with the rescission proposal now moving through notice-and-comment.

What Does California’s Climate Disclosure Law Require Right Now?

California’s Senate Bill 253 requires companies with more than $1 billion in annual revenue that do business in the state to publicly report their Scope 1 and Scope 2 greenhouse gas emissions, and large California-exposed companies faced their first reporting deadline under the finalized regulations on August 10, 2026.

That deadline followed the California Air Resources Board’s finalization of SB 253’s implementing regulations in February 2026. Companies have not waited for enforcement to force compliance: as of January 29, 2026, 94 companies had already voluntarily submitted emissions reports to CARB, including Lime, PG&E, and Frontier Airlines, suggesting a meaningful share of large California-exposed businesses are treating the law as effective and building reporting infrastructure ahead of strict enforcement.

What about California’s climate risk disclosure law?

SB 261, California’s companion law requiring disclosure of climate-related financial risk for companies with $500 million or more in revenue, is not currently enforceable — a federal court injunction halted it in November 2025. SB 253’s emissions-reporting requirement is unaffected by that injunction and remains active, which means companies can face a live Scope 1/Scope 2 obligation under SB 253 while SB 261’s risk-disclosure requirement sits in legal limbo, a distinction governance teams need to track separately rather than treating “California climate law” as one single on/off requirement.

Is the Global Trend Toward Less Climate Disclosure, or More?

It depends entirely on the jurisdiction: the United States and European Union are both scaling back mandatory climate disclosure at the same time nearly 40 other jurisdictions are adopting or expanding requirements aligned with ISSB sustainability disclosure standards.

In the EU, lawmakers reached a political agreement in 2025 to raise the employee and revenue thresholds that trigger reporting under the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive. Ropes & Gray has estimated that the revised thresholds would remove roughly 90% of previously covered companies from CSRD’s scope and about 70% from CSDDD’s scope, though the change still requires European Council approval and reporting under the narrowed scope has been pushed back to 2028. Outside the US and EU, the UK and Mexico already have active climate disclosure regimes, and Australia and Spain are rolling out requirements covering fiscal year 2025 reporting — meaning a multinational company can simultaneously see disclosure obligations loosen in its US and EU filings while facing new or expanded requirements in other markets where it operates.

Are companies pulling back on climate reporting voluntarily too?

Not uniformly. Industry voices note that companies are talking about sustainability work less publicly than in prior years, but that shift in tone has not yet translated into fewer actual disclosures — companies are still putting the underlying data out, even if they promote it less. Separately, EcoVadis has reported that 87% of companies surveyed planned to increase their sustainability investment, in a green economy estimated to be worth more than $5 trillion annually, suggesting the business case for tracking emissions data has outlasted the political fight over whether the SEC should mandate it.

What Should Governance and IR Teams Do Now?

Boards and disclosure committees should treat the SEC’s likely rescission as a floor, not a ceiling — reducing federal mandates does not remove state, EU, or investor-driven pressure to keep producing comparable climate data.

• Keep SB 253 emissions tracking live. Companies with more than $1 billion in revenue and California exposure should treat Scope 1/Scope 2 reporting as an active, ongoing obligation regardless of what happens at the SEC, since the August 10, 2026 deadline has already passed and CARB has an established voluntary-filer track record to benchmark against.
• Separate SB 253 from SB 261 in internal tracking. Emissions reporting and climate-risk disclosure are on different legal footing in California right now; conflating them risks either over- or under-complying with whichever one is actually enforceable at a given moment.
• Map disclosure obligations by jurisdiction, not by headquarters. A single global climate-disclosure calendar that assumes US and EU rules define the floor will miss active requirements in the UK, Mexico, Australia, and Spain.
• Preserve the data infrastructure built for the 2024 SEC rule. Companies that already built systems to comply with the now-likely-rescinded SEC rule should keep that infrastructure rather than dismantling it, since investor expectations, ISSB-aligned foreign requirements, and California’s SB 253 all call for substantially similar underlying emissions data.
• Watch the CSRD threshold vote. European Council approval of the narrowed CSRD/CSDDD thresholds is still pending; companies near the revised size cutoffs should model both scenarios until that vote is final.

For related governance developments, see our coverage of the SEC’s new Financial Reporting and Accounting Enforcement Unit and the broader Corporate Governance hub.

What Does the 2026 Compliance Calendar Look Like for Climate Disclosure?

Three dates anchor the current picture, and none of them point in the same direction: August 3, 2026 closed the comment window on the SEC’s proposed federal rescission; August 10, 2026 was the first real compliance deadline under California’s SB 253 emissions-reporting law; and a still-pending European Council vote will determine whether the EU’s narrowed CSRD and CSDDD thresholds take effect, with reporting under any revised scope not beginning until 2028.

That sequencing matters for planning purposes. A company that assumes the SEC’s rescission removes its climate-reporting workload entirely could be caught off guard by an active California obligation it already missed, or by continuing pressure from institutional investors who use shareholder proposals and proxy votes to push portfolio companies toward climate disclosure independent of what any single regulator requires. Kurums’ recent look at how the 2026 proxy season rewired shareholder power is a useful companion read for governance teams trying to separate regulatory obligations from investor-driven expectations that persist regardless of the SEC’s own rulemaking calendar.

Does rescinding the SEC rule remove legal risk entirely?

No. Public companies remain subject to general materiality-based disclosure obligations under existing federal securities law even without the 2024 rule’s specific line items, meaning a company that experiences a material climate-related loss or liability can still face disclosure obligations and potential enforcement exposure under longstanding securities-fraud and disclosure-adequacy principles — just without the standardized reporting template the 2024 rule would have provided.

Frequently Asked Questions

Has the SEC officially rescinded its climate disclosure rule?

Not yet as of late August 2026. The SEC proposed the rescission on May 29, 2026, and the public comment period closed August 3, 2026; a final rule has not yet been issued.

Do companies still have to disclose Scope 1 and Scope 2 emissions under California law?

Yes. California’s SB 253 requires companies with more than $1 billion in revenue doing business in the state to report Scope 1 and Scope 2 emissions, and the first deadline under the finalized implementing regulations was August 10, 2026.

Is California’s climate risk disclosure law (SB 261) currently enforceable?

No. A federal court injunction halted SB 261 in November 2025, while SB 253’s separate emissions-reporting requirement remains active and unaffected by that injunction.

Is the EU also reducing climate disclosure requirements?

The EU has agreed to raise the thresholds that trigger CSRD and CSDDD reporting, which Ropes & Gray estimates would remove about 90% of companies from CSRD scope and 70% from CSDDD scope, though the change awaits European Council approval and reporting has been pushed back to 2028.

Are any countries expanding climate disclosure requirements in 2026?

Yes. Nearly 40 jurisdictions are adopting or expanding disclosure aligned with ISSB standards, with the UK and Mexico already active and Australia and Spain rolling out requirements for fiscal year 2025 reporting.