SEC Rescinds Climate Disclosure Rules; DOL Signals ESG Investing Is an ERISA Enforcement Priority

Morgan Lewis's Summer 2026 ESG Investing Update (July 30) documents the full scope of the US regulatory reversal on ESG. The SEC has proposed rescission of its 2024 climate-related disclosure rules, citing cost concerns and statutory authority questions — the rule was already stayed in April 2024 pending judicial review and the administration withdrew its defense after the 2024 elections. Separately, the DOL's EBSA has published Field Assistance Bulletin No. 2026-01, directing enforcement staff to prioritize investigations involving breaches of the duty of loyalty — explicitly calling out "conduct designed to advance goals unrelated to participants' best interests, such as ESG objectives." A proposed rule replacing the Biden-era ESG Rule for ERISA plans is currently at OIRA, expected to revert to the standard from Trump's first term. At the state level, five state proxy advisory firm laws (Indiana, Kansas, Kentucky, Oklahoma, Tennessee) are in force, though Kansas and Indiana were enjoined as of June 2026. Texas's anti-ESG S.B. 13 was found unconstitutional in February 2026 but stayed by the Fifth Circuit in May while appeal proceeds. For asset managers, pension fund fiduciaries, and companies with public company disclosure obligations: the US regulatory direction is toward ESG obligation reduction at the federal level and enforcement escalation for ERISA fiduciaries — with simultaneous pro-ESG pressure at the state level (California SB 253, New York S.B. 9072) and continued climate litigation risk regardless of disclosure rules.