Significant developments have impacted two separate climate-related regulations concerning U.S. businesses this week.

  • The Securities and Exchange Commission has announced that it will not defend a 2024 rule that required publicly traded companies to disclose climate-related risks or emissions if the information could have an impact on investment.


“The rule is deeply flawed and could inflict significant harm on the capital markets and our economy,” says acting SEC Chair Mark Uyeda, who initially voted against the rule before it passed 3-2 in March 2024.

  • However, a California law that requires most large U.S. companies to disclose similar information has survived a lawsuit brought against it by the U.S. Chamber of Commerce.


With regulations and climate-related disclosures on the state level still potentially affecting U.S. businesses, PPAI will continue to prioritize helping member companies navigate compliance as it relates to emissions or climate risk.

Practical Impact On Promo?

The rule that the SEC has announced it will not defend was adopted in March. It would have required many publicly traded companies to disclose their greenhouse gas (GhG) emissions.

The SEC’s rules would’ve required public companies to publish their Scope 1 and Scope 2 emissions. 

  • Scope 1: Direct emissions that occur from sources that are controlled or owned by an organization, such as a company’s machinery.
  • Scope 2: Indirect emissions associated with the purchase of electricity, steam, heat or cooling.


However, the ruling has been tied up in court since April, as the SEC put a halt on it following legal challenges. The rule was originally considered a compromise from a 2022 SEC proposal that would have required publicly traded companies to sometimes report emissions throughout their supply chain. No longer in limbo, it appears that there will be no enforcement of emissions reporting for publicly traded companies by the SEC.

“While disappointing, this statement from the acting chairman of the SEC won’t practically impact PPAI member companies,” says Elizabeth Wimbush, PPAI’s director of sustainability and responsibility. “Climate reporting disclosure has been primarily voluntary and continues to grow in importance for consumers and the marketplace at large.

As we see more state-level regulatory updates in this area…PPAI will continue to provide education and resources for our members to stay ahead of the compliance curve.”

Elizabeth Wimbush

Director of Sustainability & Responsibility, PPAI

“As we see more state-level regulatory updates in this area, as well the impact from CSRD in the EU, PPAI will continue to provide education and resources for our members to stay ahead of the compliance curve.”

The ruling had stated that emissions reporting would have been enforced starting in 2026 for large companies and 2028 for midsize firms.

California Climate Laws Deemed Constitutional

In contrast to the SEC announcement, California laws Senate Bill 253 and Senate Bill 261 have survived legal challenges in court that accused the bills of being unconstitutional.

The U.S. Chamber of Commerce’s lawsuit against the bills claimed that they were effectively “shaming” companies through emissions reporting. U.S. District Judge Otis Wright II rejected this premise claiming that the laws do not create liability for the emissions generated. Instead, liability is in a failure to disclose “climate-related financial risks and measures taken to reduce and adapt to that risk.”

SB 253 – The Climate Corporate Data Accountability Act – requires U.S. companies with annual revenues exceeding $1 billion and doing business in California to disclose their Scope 1 and Scope 2 greenhouse gas emissions data starting in 2026 and their Scope 3 emissions data by 2027 (and annually thereafter).

  • More than 5,000 companies are projected to be subject to SB 253, which levies penalties up to $500,000 per year for non-compliance.


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SB 261 – The Climate-Related Financial Risk Act – requires U.S.-based companies with total annual revenues exceeding $500 million and doing business in California to prepare and submit climate-related financial risk reports. Reports must be submitted by January 1, 2026, and biennially thereafter.

  • Approximately 10,000 companies are projected to be subject to SB 261, which levies penalties up to $50,000 per year for non-compliance.