
Laws and regulations that require private sector organizations to report on climate-related matters have increased in recent years. Generally, these varied disclosure laws seek to advance transparency into these organizations’ efforts to reduce carbon emissions and encourage them to take steps to lessen their environmental impacts.
Now that President Donald Trump has returned to the White House and Republicans control Congress and are expected to employ a light regulatory touch, many companies are questioning the fate of mandatory climate reporting, particularly at the federal level.
Trump’s executive orders addressing the environment have signaled a return to fossil fuel-friendly policy and a backing away from regulations that pertain to climate-related risks.
Despite the federal government’s pivotal and unsurprising change, companies still must navigate state and international regulations as well as previous statements they made regarding climate-related goals. More importantly, the business environment has shifted from viewing environmentally friendly operations as a “nice to have” to a competitive advantage.
We offer our views on the state of climate reporting laws under the Trump administration and their impact on environmentally focused initiatives.
A 180-degree turn
The Trump and Biden administrations stand in stark contrast to one another in terms of the government’s role in addressing the climate crisis.
According to the New York Times, throughout Trump’s first term, more than 100 environmental regulations were rolled back. Given the anti-environmental, social and governance (ESG) stance advanced by Republicans during President Joe Biden’s term along with Trump’s actions through executive orders so far, Trump is taking a similar but more aggressive approach in his second term.
Biden sought to reverse course after the first Trump administration, rejoining the Paris Agreement his first day in office. He then instituted a governmentwide approach to addressing climate, including his Jan. 27, 2021, executive order, “Tackling the Climate Crisis at Home and Abroad,” and his May 20, 2021, Executive Order 14030, “Climate Related Financial Risk,” which set forth a policy “to advance consistent, clear, intelligible, comparable and accurate disclosure of climate-related financial risk.”
In contrast, on Trump’s first day in office of his second term, he pulled out of the Paris Agreement as expected and abolished each climate-related executive order Biden issued. Also, through a handful of executive orders, Trump set forth a traditional fossil fuel-focused agenda that reduces the focus on renewable energy sources and devalues environmental sustainability efforts.
Climate disclosure laws
Trump’s executive orders also signal the likely fate of the Securities and Exchange Commission’s (SEC’s) mandatory climate-related financial risk disclosures (climate disclosure) rules for public companies and in public offerings, finalized and adopted March 6, 2024. These orders are unlikely to survive the new administration.
Despite having been carved back significantly from the otherwise prescriptive proposed rules, the adopted climate disclosure rules continued to advance Biden’s climate policies. Specifically, while public companies would need to make a number of judgments as to materiality of information under the climate disclosure rules, they also broadly require companies to disclose climate-related matters of governance, strategy, risk management, targets and goals, including, for the largest public company filers, disclosures of Scopes 1 and 2 emissions. In general, Scope 1 includes emissions from owned or directly controlled sources, and Scope 2 includes indirect emissions from purchased sources, such as consumed electricity, steam or heating.
From March 6-13 of last year, a number of lawsuits were filed challenging the climate disclosure rules.
Pending litigation, the SEC stayed the climate disclosure rules. Most of the lawsuits challenged the SEC’s authority to adopt the climate disclosure rules, and others brought by the Sierra Club and Natural Resources Defense Council argued that the rules did not go far enough. The matters were consolidated before the 8th Circuit Court, and the Sierra Club and the Natural Resources Defense Council voluntarily withdrew their claims in the summer of last year.
The appellate briefing was completed in October 2024, with the parties and more than 20 amici (more than 10 supporting each side) submitting arguments, however, the arguments have not been heard. Rather, Acting SEC Chair Mark T. Uyeda, who voted against the climate disclosure rules, issued a statement Feb. 11 directing the SEC to request the 8th Circuit Court not to schedule arguments so the agency can determine its position in the litigation.
If the climate disclosure rules survive litigation, we expect the SEC will rescind them by taking an approach similar to the one the Biden administration took through Executive Order 14030 regarding the Department of Labor’s (DOL’s) regulations, generally referred to as the DOL’s ESG regulations. Particularly, in Executive Order 14030, Biden directed the DOL to consider suspending, revising or rescinding the DOL’s ESG regulations issued under the first Trump administration. The regulations generally addressed the role of ESG in retirement plan investing by fiduciaries of Employee Retirement Income Security Act-governed plans.
Under Biden, the DOL ultimately pulled the ESG regulations and issued new ones. Any rescission of the climate disclosure rules in the new administration would be consistent with Trump’s executive order, “Unleashing American Energy,” issued Jan. 20, which abolished Biden’s Executive Order 14030, among several other environmentally focused executive orders.
It is important to note the SEC’s principles-based 2010 interpretative guidance on climate-related disclosure rules remains in effect but is permissive. SEC Commissioner Hester M. Peirce, who Trump appointed in his first term, said this guidance was sufficient for the disclosure of climate-related material risks in her remarks that preceded her vote against the climate disclosure rules. Peirce openly expressed her opposition to the climate disclosure rules in the past, labeling them harmful to “investors, the economy and [the SEC].”
We can predict safely that the confirmed SEC chair will take a hands-off approach to mandating climate-related financial risk disclosures.

Climate leadership at the state, global levels
Despite these predicted changes at the federal level, we expect climate-related disclosure laws to continue at the state and international levels.
In 2023, California adopted the Climate Corporate Data Accountability Act, covering a trifecta of climate-related laws addressing participation in carbon markets, climate-related financial risk disclosures in line with the Task Force on Climate-Related Financial Disclosures (TCFD) as well as publicly available reports of Scopes 1, 2 and 3 emissions data. In general, Scope 3 emissions include indirect emissions from an organization’s value chain—emissions a company does not own or directly control.
The state’s basic criteria require companies, whether private or public, doing business in California and with certain revenue thresholds to report certain metrics: revenue of $500 million or more triggers TCFD reporting, and revenue of $1 billion or more triggers emissions reporting. While the constitutionality of California’s climate laws is subject to ongoing litigation, they have not been stayed pending the litigation. Thus far, California laws have survived various challenges even though the litigation has not been completed. As a result, companies subject to them have been preparing for compliance.
Other states also passed measures during the 2024 election addressing various positive climate measures, while at the same time, traditionally conservative states have not changed their anti-ESG stance, resulting in a number of measures that are split along party lines.
While California has led with climate disclosure legislation at the state level, other states are introducing similar emissions disclosure laws.
One notable international regulation is the European Union’s Corporate Sustainability Reporting Directive, or CSRD, a rule requiring certain companies operating in or conducting business in the EU to report on sustainability matters, including environmental disclosures in line with the TCFD. This rule is far-reaching and encompasses non-EU companies. Many U.S. multinational companies have been dedicating significant resources to preparing for public disclosures that also relate to governance, strategy, emissions and other environmental data across the value chain in line with the CSRD.
Marketplace dynamics
As the U.S. government reverses its course on environmental sustainability and is not expected to require detailed climate disclosures, other forces remain at play that are in support of the private sector’s continued focus on environmentally sustainable actions.
Private sector companies have made investments and shifts in their business models or operations to address the impact of climate-related events on their business resiliency. Aside from state and international regulatory requirements, many organizations consider their employees, customers, business partners and communities in determining the environmentally sustainable actions or operations they engage in. In this regard, environmental sustainability often has been viewed as a competitive advantage that also can attract investments, customers and talent to companies.
As a result, we expect voluntary disclosures will continue as supported by a recent survey by Workiva, a business data and reporting solutions provider, but they will be tempered in certain respects.
For example, we expect organizations will disclose emissions but step back from previously stated reduction targets. Similarly, this is a time when environmental sustainability should be viewed as integral to business strategy rather than being a “nice to have.” Despite geopolitical concerns, a recent survey of chief financial officers by climate action media platform We Don’t Have Time and global management consulting firm Kearney supports a dominant view for a business case in investing in environmental sustainability.
Moving beyond the term of ESG and watching the trend lines, addressing climate-related impacts on business has become table stakes as companies navigate broader stakeholder and business partner expectations.
While the Trump administration has introduced a level of uncertainty in climate reporting, and its approach could deter certain renewable investments, we do not necessarily see the private sector reversing course on their actions.
If anything, the considerations might have shifted. Specifically, organizations could take a more cautious approach to how they share their climate-related actions with their stakeholders to mitigate litigation risk on climate-related statements and promises but maintain a greater focus on the business case for environmentally sustainable actions.
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