The U.S. Securities and Exchange Commission has moved to withdraw from defending its Climate-Related Disclosures Rule in ongoing court challenges, while leaving the rule formally in place. Commissioner Caroline A. Crenshaw published a statement criticising the decision as an effort to achieve the rule’s demise through litigation without using the formal rulemaking process. Crenshaw argued that the Administrative Procedure Act requires the Commission to follow the same notice-and-comment procedures to rescind or amend an existing rule as it used to adopt it, and described the withdrawal from the rule’s defense as inconsistent with historical practice and sound governance. She also stated that the Commission’s existing litigation arguments remain substantively sound and cited no change in statutory authority, judicial precedent, the administrative record, economic analysis, or investor demand that would justify abandoning the defense. She called for the SEC to either defend the rule or seek a stay of the litigation while the agency develops an approach it is prepared to defend, including potential rescission conducted in accordance with Administrative Procedure Act requirements, and suggested that the court appoint counsel to advocate in the case if it proceeds without the SEC’s participation.
U.S. Securities & Exchange Commission 2025-03-27
U.S. Securities and Exchange Commission votes to stop defending its Climate-Related Disclosures Rule in litigation
The U.S. Securities and Exchange Commission (SEC) will withdraw from defending its Climate-Related Disclosures Rule in court, while keeping the rule in place. Commissioner Caroline A. Crenshaw criticized this, arguing it bypasses the formal rulemaking process required by the Administrative Procedure Act. She urged the SEC to defend the rule or seek a litigation stay to develop a defensible approach, suggesting court-appointed counsel if the SEC does not participate.