Sierra Club, Earthjustice Lawsuit Challenges SEC’s Weakened Climate Risk Disclosure Rule

Final Rule Significantly Curtailed Emissions Disclosure Requirements Despite Widespread Support

WASHINGTON, DC — Today, the Sierra Club and the Sierra Club Foundation, represented by Earthjustice, filed a lawsuit against the Securities and Exchange Commission (SEC) in the U.S. Court of Appeals for the D.C. Circuit over its final rule requiring public companies to disclose climate-related risks to their businesses and plans to manage or mitigate them. The final rule will yield much less information about companies’ exposure to climate-based risks than the proposed rule would have.

Climate change is already having a profound impact on our financial system, costing the U.S. economy hundreds of billions of dollars annually. With each passing year, companies are exposed to still greater risk of physical asset loss, supply chain delays, regulatory pressure, costly litigation, and other risks.  

The Sierra Club and the Sierra Club Foundation manage millions of dollars in investments for their respective organizations, including employee 401Ks. In addition, the Sierra Club represents millions of members and supporters, many of whom have significant investments of their own. These investors cannot adequately manage their investments without complete information on publicly-traded companies’ vulnerability to climate-related risks, including greenhouse gas emissions profiles. By allowing companies to selectively report their emissions, the SEC has fallen short of its statutory mandate to protect investors, maintain fair, orderly, and efficient markets, and promote capital formation.

The Sierra Club and Sierra Club Foundation affirm the SEC’s fundamental legal authority to require climate-based disclosures and call on the agency to fulfill its obligation to protect investors.

Ben Jealous, Executive Director of the Sierra Club:

"While the SEC's final climate disclosure rule will provide investors with some much needed information, the Commission's arbitrary decision to remove robust emissions disclosure requirements and other key elements from the proposed rule falls short of what the law requires. Through legal action, we hope to ensure that all investors, including the Sierra Club and its members, have the information they need to evaluate companies’ climate-related risks, make smart investment decisions, and protect their assets for decades to come."

Dan Chu, Executive Director of the Sierra Club Foundation

“The SEC has a responsibility to the Sierra Club Foundation, as an investor, to ensure that we have the tools and information needed to fully assess the risks and opportunities within our portfolios. The new disclosure rules fall short of providing us with the complete and consistent information we need to assess the significant financial risk that climate poses to companies and investments. Through legal recourse, we aim to hold the SEC accountable to its mission: protect and empower the rights of every single investor.”


The SEC proposed its climate risk disclosure rule in March 2022 to address the difficulties facing investors and other market participants in assessing companies’ handling of climate-related risks. The SEC released its final rule in March 2024.

In its final rule, the SEC capitulated to industry lobbyists by rolling back emissions disclosure requirements. The final rule arbitrarily removed Scope 3 emissions disclosure requirements, which were included in the proposed rule and supported by 97% of investor comments, and weakened Scope 1 and 2 emissions disclosure requirements. Scope 3 emissions, which result from a company’s supply chains and the use of its products, account for the largest share of most companies’ greenhouse gas emissions, particularly for the most polluting industries.

Investors need complete information about a company’s exposure to climate-related financial risks through a full accounting of their greenhouse gas (GHG) emissions in order to better determine whether a company’s business practices align with their transition plans and/or emissions reduction targets. The final rule removes this requirement and may open investors to misleading and incomplete information. 

The Sierra Club, the Sierra Club Foundation, and Earthjustice submitted multiple comments to the SEC on the rulemaking proposal: the Sierra Club in June 2022November 2022February 2023April 2023, and October 2023; the Sierra Club Foundation in June 2021; and Earthjustice in June 2022. Sierra Club Foundation also signed onto multiple letters from investor groups including the Coalition on Inclusive Economic GrowthUN Principles for Responsible Investment, and 143 investors representing $965 billion in assets under management.

About the Sierra Club

The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit