Commissioner Crenshaw Criticizes SEC’s Status Report on Climate Disclosure Rules Litigation

Key Takeaways

• SEC Status Report: The SEC told the Eighth Circuit it does not currently intend to review or reconsider the climate-related disclosure rules adopted in March 2024.
• Crenshaw’s Criticism: Commissioner Caroline Crenshaw argued the agency failed to answer the court’s direct question on whether it would uphold the rules if lawsuits are denied.
• Legal Process Concerns: Crenshaw warned the SEC may be attempting to bypass the required rule rescission process under the Administrative Procedure Act.
• Internal Opposition: Three of the four current Commissioners have publicly opposed the rules and voted to withdraw the SEC’s defense of them in March 2025.
• Uncertain Future: The Eighth Circuit has not yet responded, and the fate of the climate disclosure rules remains unresolved amid ongoing litigation.

Deep Dive

U.S. Securities and Exchange Commission (SEC) Commissioner Caroline A. Crenshaw issued a strongly worded statement on July 23 criticizing the agency’s response to a federal court order in ongoing litigation over its climate-related disclosure rules.

The Eighth Circuit Court of Appeals had instructed the SEC in April to clarify its position regarding the rules, which were finalized in March 2024 and require public companies to disclose certain climate-related risks. Specifically, the court asked whether the Commission intends to review or reconsider the rules, and—if not—whether it would continue to uphold them should legal challenges fail.

In its July 23 status report, the SEC stated that it does not currently intend to revisit the rules. However, the Commission also explained that it could not comment further on future actions without prejudging potential policy decisions and noted that any future rulemaking might benefit from judicial clarification on the agency’s statutory authority.

Commissioner Crenshaw, who supported the adoption of the rules in 2024, criticized the status report as being insufficiently responsive to the court’s directive.

“The Court asked us in no uncertain terms ‘will the Commission adhere to the Rules if the petitions for review are denied?’ We did not—but should have—answered that question,” she wrote.

Crenshaw argued that the Commission’s response does not directly address the court’s inquiry regarding adherence to the rules in the event the challenges are denied. She expressed concern that the Commission may not intend to enforce the rules, referencing past public statements from fellow Commissioners who have opposed the rule and a March 2025 decision by the Commission to withdraw from defending it in litigation.

The SEC’s climate disclosure rules have faced several legal challenges since their adoption, with opponents raising questions about the agency’s authority and the potential compliance burden on registrants. In March 2025, under a new Commission composition, the agency voted to cease defending the rules in court, citing concerns about their scope and cost.

Crenshaw’s statement also raised broader questions about the Commission’s rulemaking obligations under the Administrative Procedure Act (APA), which requires formal notice-and-comment procedures for repealing or modifying existing rules.

“If this Commission wants to rescind, repeal or modify the Rules, which were promulgated by-the-book, then it must do the statutorily-required work,” she wrote.

While acknowledging that reversing the rule would require substantial resources, Crenshaw suggested that such a step must still follow proper legal processes. She referenced comments made by Commissioner Mark Uyeda in May, who stated that rescinding the rule would be “a difficult lift” that could divert staff from other priorities.

The Eighth Circuit has not yet issued a response to the SEC’s status report. The future of the climate disclosure rules remains uncertain as the litigation continues and the Commission weighs its next steps.

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