U.S.: SEC Moves to Rescind Climate Disclosure Rules
On May 7, 2026, the U.S. Securities and Exchange Commission (the “SEC” or “Commission”) notified the U.S. Court of Appeals for the Eighth Circuit (the “Eighth Circuit”) that it will not renew its defense of its Climate-Related Disclosure Rules (the “Rules”), and that the Commission staff had submitted to the Office of Information and Regulatory Affairs (“OIRA”) a proposed rule to rescind the Rules. The SEC also stated that Commission staff had prepared recommendations addressing legal and policy concerns, including whether the Rules exceed the Commission’s statutory authority and whether the Rules’ costs outweigh their benefits.
Adopted in March 2024, the Rules would have required registrants, including foreign private issuers, to disclose climate-related information in registration statements and periodic reports (as we reported here). The Rules were quickly challenged in six federal courts; the petitions in those legal challenges were subsequently consolidated in the Eighth Circuit, on March 21, 2024. In April 2024, the SEC stayed the Rules pending judicial review, and in March 2025, the SEC voted to end its defense of the Rules in the litigation (as we reported here).
The SEC’s proposed rescission, entitled “Recission of Climate-Related Disclosure Rules,” will be published in the Federal Register, after which it will be subject to a public comment period.
Links:
SEC May 7, 2026 Letter to the U.S. Court of Appeals for the Eighth Circuit
OIRA Pending EO 12866 Regulatory Review: Rescission of Climate-Related Disclosure Rules
EU: European Commission Issues Revised Sustainability Reporting Standards
On May 6, 2026, the European Commission issued and opened a one-month comment period on (i) draft revised European Sustainability Reporting Standards (“ESRS”) and (ii) a draft voluntary sustainability reporting standard for smaller companies not subject to the Corporate Sustainability Reporting Directive (the “CSRD”).
The revisions are intended to reduce reporting burdens while preserving the quality of sustainability disclosures. The revised ESRS reduce mandatory datapoints by more than 60% and total datapoints by more than 70%, with expected per-company reporting cost reductions of more than 30%. The draft revisions also prioritize quantitative over qualitative disclosures where possible, give companies additional reporting flexibility, and simplify the mandatory materiality assessment while retaining the fundamental “double materiality” principle.
The revised ESRS largely build on technical advice received in December 2025 from the European Financial Reporting Advisory Group, which provides technical advice to the Commission. The changes are targeted at further easing the reporting burden without undermining the CSRD’s policy objectives.
Feedback on the revised ESRS may be provided until June 3, 2026. The Commission intends to adopt the Delegated Acts shortly thereafter, although the European Parliament and European Council will have the opportunity to review before the revised ESRS enter into force later in 2026. Under the Commission’s proposal, the revised ESRS will apply to companies reporting under the CSRD in respect of their financial years beginning on or after January 1, 2027, although companies may choose to apply the standards to their CSRD reports in respect of their 2026 financial years where relevant.
Link:
European Commission Press Release
EU: European Commission Publishes EU Deforestation Regulation Simplification Report
On May 4, 2026, the European Commission (the “Commission”) published a report providing an update on the process to simplify the revised EU Deforestation Regulation (the “EUDR”), as required by the regulation.
The EUDR is intended to reduce the EU’s contribution to global deforestation and forest degradation by requiring covered commodities and products placed on, made available on, or exported from the EU market to be “deforestation-free.” The EUDR covers seven commodities: cattle, cocoa, coffee, palm oil, soy, wood, and rubber, as well as certain derived products. The EUDR entered into force in June 2023 and was revised in December 2024 and December 2025.
Article 34(1a) of the EUDR requires the Commission to prepare a report describing the simplification measures introduced since the regulation entered into force and assessing the regulation’s administrative burden and impact. The Commission concluded that these measures are expected to reduce annual compliance costs by roughly 75% compared with the original EUDR. The package includes an updated guidance document, revised FAQs, a draft delegated act amending the EUDR product scope, and planned trade-facilitation tools.
The EUDR will apply starting December 30, 2026, for large and medium companies, as well as micro and small enterprises in the timber sector, and from June 30, 2027, for other micro and small enterprises.
Links:
European Commission Press Release
Report to the European Council and Parliament on the Simplification Review of the EUDR
Guidance Document for the Regulation on Deforestation-Free Products
FAQs on EUDR Implementation
EU: European Parliament Publishes Draft Report on SFDR 2.0
On April 28, 2026, the European Parliament’s Committee on Economic and Monetary Affairs published a draft report on the proposed amendment to the Sustainable Finance Disclosure Regulation (“SFDR”), commonly referred to as “SFDR 2.0.” The draft report is the next step in the EU legislative process and proposes several changes to the European Commission’s November 2025 proposal. The report represents the Committee’s view of the Commission’s November 2025 proposal, and the European Parliament will use these recommendations to finalize its own position.
The Commission’s proposal would replace the current SFDR framework with a product categorization regime with minimum, quantifiable criteria, including “Sustainable,” “Transition,” and “ESG Basics” categories, while simplifying the disclosure templates and removing certain entity-level disclosure requirements. The Parliament’s draft report broadly supports this direction but proposes a number of adjustments, including bringing certain packaged retail investment products (known as “PRIPs”) within scope, as well as “tightening” requirements for products to fall within one of the new categories. The draft report does this, for example, by introducing a limited set of mandatory principal-adverse-impact indicators (with additional indicators to be disclosed where material for particular investments) for products falling within one of the three new categories. The draft report would also require uncategorized products that disclose sustainability-related information to include a disclaimer that they do not meet EU standards for sustainable financial products or for protecting against greenwashing.
The draft report suggests that the final SFDR 2.0 regime will retain significant disclosure and substantiation requirements even as the European Union seeks to simplify the framework. The draft report also proposes a 24-month transition period before SFDR 2.0 applies (as opposed to 18 months under the Commission’s original proposal), meaning SFDR 2.0 is not expected to apply before 2028.
Links:
Draft Report
November 2025 Proposal
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