United States: SEC (Securities and Exchange Commission)

Climate-related financial disclosures for US-listed companies.
Status: 2024 rules stayed in 2025 pending litigation; financial materiality approach.

Coverage

~7,000

US-listed companies (2025)[9]

Materiality Standard

Financial

Disclosure only if material to investors[1][5][9]

Scope 1 & 2 Emissions

Required*

Large accelerated filers, phased in 2026–2028[1][4][5]

Scope 3 Emissions

Voluntary

Recommended if material or target-linked[1][4][5]

SEC Climate Disclosure Rule: Key Requirements

Dimension	Description	Required?
Governance	Board and management oversight of climate risks	Yes
Risk Management	Identification, assessment, and management of material climate risks	Yes
Strategy	Material impacts of climate risks on business model and financials	Yes
Emissions Reporting	Scope 1 & 2 GHG emissions (large filers); Scope 3 if material or target-linked	Yes*
Financial Statement Impacts	Material climate-related effects on consolidated financials	Yes
Assurance	Third-party limited assurance (Scope 1 & 2, phased); reasonable assurance by 2030	Yes*

^* Scope 1 & 2 phased, Scope 3 voluntary; rule stayed pending litigation as of April 2025[1][2][3][5][6][7][8]

SEC Climate Rule Timeline and Status

Year	Milestone	Status (2025)
2022	Rule proposed: “Enhancement and Standardization of Climate-Related Disclosures”	Finalized in 2024
2024	Rule adopted (March); immediate legal challenges, voluntary stay issued (April)	Stayed, not in effect[1][2][3][5][6][7][8]
2025	SEC ends defense of rule in court (March 27)	Litigation ongoing; implementation uncertain[2][3][6][7][8]
2026–2028	Phased compliance for Scope 1 & 2 (if rule survives)	Uncertain

SEC Climate Rule: Coverage by Company Type

Estimated number of US-listed companies by filer type (2025)[9].

SEC Integration and Influence

Materiality: Financial materiality standard (US Supreme Court definition)[1][5][9]
Alignment: TCFD structure, GHG Protocol, ISSB climate disclosure[4][5][9]
Assurance: Third-party limited assurance (Scope 1 & 2), reasonable by 2030[1][5]
Legal status: Rule stayed, enforcement paused pending litigation as of April 2025[2][3][6][7][8]
Comparison: Narrower than EU CSRD (no double materiality, Scope 3 voluntary)[9]

About the SEC Climate Disclosure Rule

The SEC’s 2024 climate disclosure rule, now stayed pending litigation, would require all US-listed companies to disclose material climate-related risks, governance, risk management, strategy, and Scope 1 & 2 GHG emissions (Scope 3 voluntary)[1][2][3][4][5][6][7][8][9]. The rule is built on financial materiality and TCFD alignment, with phased assurance and integration into Regulation S-K and S-X. Its legal fate remains uncertain, but climate-related risk is now embedded in US securities law and investor expectations.

Note: All data reflects official SEC, legal, and industry updates as of May 2025.

United States - SEC (Securities and Exchange Commission)

United States - SEC (Securities and Exchange Commission)

Countries: United States
Function: Climate-related financial disclosures required for publicly listed companies; financial materiality approach

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The United States Securities and Exchange Commission (SEC) has undertaken a pivotal regulatory shift to embed climate-related risk disclosure into the foundation of public company reporting. Historically focused on traditional financial materiality under the Securities Act of 1933 and the Securities Exchange Act of 1934, the SEC increasingly recognizes climate-related risks as foreseeable and quantifiable threats to enterprise value, investor decision-making, and systemic market stability.

In March 2022, the SEC proposed "The Enhancement and Standardization of Climate-Related Disclosures for Investors," its first comprehensive effort to mandate structured climate disclosures across public markets. After extensive consultation, political contention, and industry feedback, the final rules were adopted in March 2024, applying to all publicly listed companies on US exchanges, including foreign private issuers.

The final SEC climate disclosure rules require companies to report across several key dimensions:

Governance: Board and management oversight of climate-related risks.
Risk management: Identification, assessment, and management processes for material climate risks.
Strategy and business model impact: How climate risks materially affect strategic planning and financial position.
Emissions reporting: Scope 1 and Scope 2 emissions disclosure required for large, accelerated filers, with phased assurance. Scope 3 disclosures, initially proposed, were removed but remain recommended when material or tied to public targets.
Financial statement impacts: Disclosure of material climate-related effects on consolidated financial statements, including impacts on expenditures, assumptions, and estimates.

The framework draws heavily from the Task Force on Climate-related Financial Disclosures (TCFD) structure, organized around governance, strategy, risk management, and metrics. However, unlike the European Union’s CSRD, the SEC maintains a strict financial materiality approach, requiring disclosure only where climate-related factors are likely to affect an investor’s assessment of enterprise value. Materiality is determined under the established US Supreme Court standard for investor relevance.

The SEC rules aim to:

Standardize climate-related information for greater comparability.
Enhance reliability and auditability of sustainability disclosures.
Reduce information asymmetry on physical and transition climate risks.
Strengthen systemic financial oversight through transparent risk pricing.

Integration into Regulation S-K and Regulation S-X filings elevates climate risk disclosure to a legal and fiduciary priority for US-listed companies. It also aligns US disclosure practices more closely with global initiatives such as the IFRS Foundation’s ISSB standards, albeit with a more narrowly financial focus.

The SEC’s climate rules faced immediate legal challenges. Several lawsuits, primarily from US states and business groups, argue that the SEC exceeded its statutory authority and imposed undue regulatory burdens. In response, the SEC voluntarily stayed enforcement pending the resolution of litigation, creating uncertainty over implementation timelines and scope.

Despite these challenges, the SEC’s adoption of climate disclosure requirements marks a structural transformation in American financial regulation. Even amid contested enforcement, climate-related financial risk has become embedded within the US securities law landscape, reshaping corporate governance, investor stewardship, and the integration of sustainability into long-term market stability.