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The U.S. Securities and Exchange Commission (SEC) has formally decided to scrap its legal defence of new climate-risk disclosure rules.

The regulator voted Thursday to abandon a legal fight over new climate disclosure rules that were adopted just over a year ago. The rules sought to expand companies’ disclosure of climate-related risks, specifically their greenhouse gas emissions.

Those rules faced an array of legal challenges from corporate interest groups and certain states and the SEC stayed the rules pending the outcome of that litigation, which was ultimately consolidated into a case before the Eighth Circuit.

Now, the SEC has informed the court that it won’t be pursuing its defence of the proposed rules, which was begun under the previous administration.

“The goal of today’s commission action and notification to the court is to cease the commission’s involvement in the defense of the costly and unnecessarily intrusive climate change disclosure rules,” said Mark Uyeda, acting chairman of the SEC in a release.

The fate of climate disclosure proposals from Canadian regulators, which have been in limbo since 2022, remains to be seen.

Previously, the Canadian Securities Administrators (CSA) said that it was “carefully considering developments in the United States,” when it comes to setting new climate disclosure standards, citing the “interconnectedness” of Canadian and U.S. securities markets.

The CSA first proposed its own new climate disclosure rules in 2021, but paused that work, given efforts by the SEC and the International Sustainability Standards Board (ISSB) to develop their own standards — amid a desire to avoid conflicting requirements.

Additionally, the Canadian Sustainability Standards Board (CSSB) has since finalized its own disclosure proposals in late 2024. However, its proposed standards remain voluntary, and would need to be incorporated into a CSA rule to become mandated.