In May, the U.S. Securities and Exchange Commission (SEC) voted to propose rescinding the corporate climate disclosure rules it had earlier proposed. The headlines wrote themselves: the era of mandatory climate reporting in America is over before it began.
That is the wrong read. The federal rule never took effect in the first place, so its rescission changes almost nothing about the disclosure requirements companies actually face. What has changed, and what the headlines mostly missed, is that the reporting landscape got more complex this year, not less.
Start with California, where the Air Resources Board is requiring companies to disclose greenhouse gas emissions and climate-related risks. The former requirement applies to companies with greater than $1 billion in revenue doing business in California, while the latter applies to the companies meeting the lower bar of $500 million in revenue. Only about 38% of the firms already identified are headquartered in California. For everyone else, this is no longer an abstract policy debate happening in someone else’s state. (The rollout of the climate risk rule is currently pending court review, while the first deadline for greenhouse gas emissions disclosure is November 10.)
California’s rules are expansive in substance, not just reach. Companies over $1 billion in revenue must report the emissions of their value chains (scope 3 emissions), not just the operational emissions the federal rule would have required, and file a climate risk disclosure on top of it. In summary, a privately held distributor in Ohio with meaningful California sales now has a harder reporting obligation than it would have had under the SEC rule.
Then there is Europe, where the picture is more complicated but no less real. The EU’s Omnibus package, finalized in December 2025, narrowed the Corporate Sustainability Reporting Directive (CSRD): higher revenue and headcount thresholds for non-EU companies, a smaller population of U.S. companies in scope, and non-EU reporting pushed out to 2028. Companies that clear the new thresholds still have to report on a much wider range of metrics than the California rules require.
Add the frameworks emerging in other jurisdictions, and the requirements large customers increasingly write into contracts, and the picture is clear. Japan, Singapore, Australia, Hong Kong, Malaysia, and China have all moved to mandatory, ISSB-aligned climate disclosure on staggered timelines.
This is the pattern I would encourage business leaders to internalize: the landscape is fragmented and unpredictable, and it is likely to stay that way. Companies that built their reporting strategy around a single regulatory pathway, federal or otherwise, are the ones scrambling now. The companies in the best position treated any individual mandate as one output among several, not the reason for the exercise.
Increasingly, disclosure is also being driven by markets rather than regulators alone. Investors, lenders, insurers, and major customers continue to expect climate-related information because they increasingly view it as financially material to long-term performance. That expectation is unlikely to disappear even if individual regulations change.
With Scope 3 disclosures coming to California in 2027, the real challenge is not the carbon math. It is building transparent, assurance-ready systems that reduce the data wrangling burden, create a single source of truth, and empower action. Companies that fall into the measurement trap, standing up a process to satisfy one rule and filing until the next cycle, end up rebuilding every time the rules shift. Companies that collect the data once, rigorously, can satisfy California, CSRD, investor requests, customer requirements, and future disclosure obligations from a single trusted data foundation while using that same information to identify efficiency projects that pay for themselves.
The companies getting the most value from climate reporting are no longer treating it solely as a compliance exercise. They’re using the same data to identify operational efficiencies, understand supplier risk, reduce energy costs, and make better investment decisions. Reporting is becoming part of how businesses operate — not just how they comply.
The instinct will be to treat California, CSRD, and other regulations as the next urgent compliance burden. In reality, they are an opportunity to future-proof the business.
To take one example, the data regulators are demanding, captured in utility bills, fleet performance, and supplier activity, creates a blueprint of energy usage that companies can use to cut costs, capture incentives, and hedge risk in an increasingly volatile energy market. A 2024 World Economic Forum and PwC analysis found that already-available energy efficiency measures could unlock roughly $2 trillion a year for businesses worldwide.
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That is also why the political noise matters less than it seems. For most operators, the question is less around whatever acronym is under fire and more about meat and potatoes: what do my regulators, my customers, and my lenders require, and what does this data tell me about my own costs? Those questions do not change with the composition of a commission in Washington.
Companies that lay the groundwork now and integrate reporting into everyday operations will not just be prepared for the next disclosure requirement. They’ll build a lasting operational advantage that helps them respond to changing regulations, investor expectations, and market demands — regardless of which frameworks ultimately survive.
Editor’s Note: The opinions expressed here by the authors are their own, not those of Impakter.com — Featured Photo Credit: Wikimedia Commons.
