US President Donald Trump revoked an executive order by his predecessor on Monday that required federal agencies to take steps to assess climate-related risks to the country's economy.
The order revocation comes as part of a flurry of repeals and executive orders from Trump in his first days in office. The move, along with withdrawing the US from the Paris Climate Agreement, is in line with Trump's plans to distance his administration from former president Joe Biden's environmental goals, following campaign promises to focus on a deregulatory agenda and increase US oil production.
"Climate extremism has exploded inflation and overburdened businesses with regulation," the executive order said.
Biden issued his executive order in 2021 directing the federal government to take steps to assess climate risk impacts on the financial system, homeowners and businesses and then help inform the government and investors of those risks. It also required the identification of public and private financing needs to meet the Biden administration's net-zero emissions target for the US economy by 2050.
But some of Biden's plans were already on their way out in the final days of his administration, while others are likely to be revisited by the government under Trump.
The US Department of Defense (DOD), National Aeronautics and Space Administration (NASA), General Services Administration (GSA) on 13 January withdrew their proposed rule to amend the Federal Acquisition Regulation, which would have required major federal suppliers to publicly disclose GHG emissions and climate-related financial risk along with setting science-based GHG reduction targets in line with the executive order. The agencies cited a lack of time to finalize the rule, first proposed in 2022, before the end of the Biden administration.
The lack of Trump support for federal climate-change disclosures is likely to slow progress on creating a national framework for measuring the impact of climate-change on US financial systems, investments, and housing among other sectors. The impact is likely to leave federal agencies unprepared to handle the aftermath, according to non-profit group Ceres.
"Without comprehensive data and planning frameworks in place, federal agencies will be ill-equipped to protect taxpayer investments, ensure continuity of critical services, and build resilience against growing climate-related threats," said Steven Rothstein, managing director of the Ceres Accelerator for Sustainable Capital Markets.
With the departure of US Securities and Exchange Commission's (SEC) chairman Gary Gensler on Monday, Trump's Republican replacement, acting chairman Mark Uyeda, will likely revisit the SEC's related disclosure requirements. Under a rule finalized last year, companies publicly listed in the US must begin disclosure of climate-related information by March 2026.
But state-level action will continue even if the federal government unravels the previous administration's disclosure requirements.
California has already mandated these disclosures. SB 261, signed by governor Gavin Newsom (D) in 2023, requires companies operating in the state with revenues of $500mn/yr or more to biennially report, starting in 2026, the immediate and long-term climate-related financial risks within their operations and supply chain. The California Air Resources Board is taking public feedback to develop the regulations through July, with disclosures beginning in 2026. New York is also considering similar requirements.