About half of the companies that would have been under the scope of the US Securities and Exchange Commission’s (SEC) now defunct climate disclosure rule may still need to report their emissions under other jurisdictions including California, according to a new analysis.
Advocacy group Ceres estimates that roughly 7,000 to 8,000 companies would have needed to report under the SEC’s climate disclosure rule. The rule is being challenged in court and yesterday the SEC announced that its legal defence would be dropped.
Meanwhile, close to 4,700 companies will be subject to California’s climate risk rules, about half of what Ceres had originally estimated when the rule first came out in 2023. These rules require any large company doing business in California to publicly disclose greenhouse gas emissions across its supply chain. A separate rule would require companies with a lower revenue threshold to detail how climate change poses a risk to their global operations, which would affect about 2,700 companies.
That means roughly 30% of companies under the SEC rules will still need to report, with another 10-20% likely having to report under other jurisdictions, such as the EU’s climate reporting rules, said Steven Rothstein, managing director at Ceres.
“Those collectively will represent 55% of the world’s GDP. So many large [US] companies that are operating in Canada or Europe or Asia or many other places, they’re going to have to do these requirements anyway,” he said.
The exact number subject to the rules could change as California’s regulator, the California Air Resources Board (Carb), has yet to define what “doing business in California” means. Carb has until 1 July to adopt how it will implement the rules but has already said it will not enforce the rules for the first year to give companies time to adjust to the requirements.
Ceres decided to update its numbers to help drive the conversation about who needs to report, said Jake Rascoff, director of climate financial regulation and one of the report’s analysts.
“The public conversation has been informed by those earlier estimates, which we now believe are inflated. So we just wanted an accurate public [estimation] of how many companies are impacted by these laws,” said Rascoff.
While the federal government and SEC have rolled back on their climate and green commitments, some US states are exploring similar disclosure rules, including New York, New Jersey and Illinois. This could potentially increase the number of companies that would need to disclose climate data but it is too early to tell by how much, Rascoff and Rothstein said.
The EU’s climate disclosure and due diligence rules will also impact US firms, but it remains unclear just how many due to proposals to simplify sustainability reporting – the omnibus proposal – which if carried through will reduce the scope. Republican lawmakers have attacked the EU’s ESG rules, which they say are hostile, while the American Chamber of Commerce says the plan goes too far.
“It would not shock me if this administration were to make Europe’s sustainability-related directives a component of their trade priorities. I guess we’ll have to see sort of what form that takes,” said Rascoff.
This page was last updated March 28, 2025
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Moriah Costa is the Editor-in-Chief of Green Central Banking and has over a decade of experience writing about banking and finance. She is an award-winning American journalist based in Paris and has written for major international publications, including Reuters, The Guardian, and S&P Global. Having grown up in water-stressed Arizona, she has always had a strong interest in bringing awareness to climate and environmental issues.
