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As expected, the U.S. Securities and Exchange Commission (SEC) is retreating from its tougher climate disclosure rules by halting its legal defence of the rules.

In a statement released Tuesday, Mark Uyeda, acting chairman of the SEC, said he’s requested the courts not to schedule arguments in the ongoing litigation over the regulator’s proposed new rules.

After the SEC adopted tougher climate disclosure rules in March 2024, they faced a series of legal challenges in various circuit courts from energy companies, industry lobby groups, states, and others. These cases have been consolidated before the Eighth Circuit court, and the SEC stayed the rule pending the outcome of that litigation.

Now, it’s asking the court to “not schedule the case for argument to provide time for the commission to deliberate and determine the appropriate next steps in these cases.”

In his statement, Uyeda, who voted against the rules as an SEC commissioner, reiterated his opposition to more stringent rules, saying that the benefits of added disclosure wouldn’t outweigh the costs.

“The commission’s briefs previously submitted in the cases consolidated in the Eighth Circuit do not reflect my views. The briefs defend the commission’s adoption of the rule, but I continue to question the statutory authority of the commission to adopt the rule, the need for the rule, and the evaluation of costs and benefits,” he said.

Uyeda said the SEC will notify the court, once it has reconsidered its position on the litigation.

In response to the move, Benjamin Schiffrin, director of securities policy at advocacy group Better Markets, issued a statement, saying: “The suggestion that the SEC will no longer defend the rule will prevent investors from receiving essential information about public companies and therefore harm our markets.

“As we explained in our amicus brief defending the rule, the SEC has broad statutory authority to require company disclosures that protect investors and serve the public interest. The climate risk disclosure rule does just that. It protects investors by providing them with information about the climate-related risks the companies they invest in face,” he said.

“Investors suffer when they lack access to material information, and the climate-related risks companies face are material to their bottom line. That is why the SEC passed the rule in the first place — not to regulate climate change but to ensure that investors know about the climate-related risks that matter just like other risks that are important to investors,” he added.

In Canada, while the Canadian Sustainability Standards Board issued its final climate disclosure standards in December last year, the Canadian Securities Administrators has said it’s still working on its own climate-related disclosure rules.