![\"Washington](\"https:\/\/www.europesays.com\/france\/wp-content\/uploads\/2026\/08\/SEC-headquarters_GettyImages-941523684-716x478.jpg\" "\\"US")
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Federated Hermes and major US insurer Travelers have backed the Securities and Exchange Commission\u2019s (SEC) proposed rescission of its climate disclosure rules as the market consultation closed on Monday.<\/p>\n
The SEC announced its\u202frescission proposal<\/a> in May, saying the rules exceed the scope of its statutory authority and are \u201cunnecessary and inconsistent\u201d with a registrant-specific, materiality-based approach to disclosure.<\/p>\n The move from Federated Hermes and Travelers put them at odds with major investors including Schroders and Norges Bank Investment Management (NBIM)<\/a>, who advocated for the rules to be retained but amended, and CalSTRS and the New York State Comptroller who opposed the planned pullback altogether.<\/p>\n The $105 billion Travelers said in its response<\/a> that it felt the final rules \u201cdo not eliminate fundamental concerns\u201d raised during the original consultation, and that material climate risks are already required to be disclosed under existing, non-climate-specific rules.<\/p>\n \u201cThis approach provides flexibility for companies to tailor disclosures to their unique circumstances while ensuring that investors receive information that is relevant to investment\u00a0decisions,\u201d continued the response, signed by the firm\u2019s CSO and group general counsel Yafit Cohn.<\/p>\n \u201cComplex, interconnected and highly prescriptive sets of disclosure requirements focused on a specific topic encourage the production of large volumes of information that may not be material to investors and may obscure information that is.\u201d<\/p>\n Federated Hermes also supported the rescission proposal<\/a>, noting that existing securities laws and disclosure requirements \u201calready provide an appropriate framework for companies to disclose material climate-related risks and opportunities based on their specific facts and circumstances\u201d.<\/p>\n The firm also said that requirements which \u201cimpose significant costs while producing limited decision-useful information\u201d can harm both issuers and investors, and reduce the competitiveness of US capital markets.<\/p>\n The Federated Hermes\u2019 response contrasts with a submission by its stewardship arm, EOS<\/a>. While falling short of opposing rescission, EOS warned that a \u201cbalance needs to be struck to best support the common goal of risk-adjusted returns and value creation for all stakeholders\u201d.<\/p>\n It agreed that there are opportunities to eliminate redundancies and streamline certain requirements, but rescinding the rule entirely would mean investors would continue to incur additional costs to \u201cobtain, estimate and reconcile fragmented information\u201d.<\/p>\n Slimming support<\/p>\n Other large investors identified opportunities for further streamlining of the rules, but stated that they should not be ditched entirely.<\/p>\n Schroders said in its response<\/a> that the cost concerns raised by the SEC are legitimate, with the burden falling most heavily on smaller registrants, but advocated for\u00a0retaining\u00a0\u201cat least a streamlined core\u201d of disclosures.<\/p>\n These should be centred around material climate risk, materiality-qualified Scope 1 and 2\u00a0emissions, and simplified governance disclosures, which are already made public by almost all of the largest registrants, and at least two-thirds of in-scope firms.<\/p>\n Mandatory requirements in this area, Schroders said, would standardise existing practice rather than create new burdens, and would not discourage companies from going public.<\/p>\n Similarly,\u00a0NBIM said<\/a> it recognised alternatives that would address concerns about the scope and cost of the rules while preserving an investor-relevant baseline.<\/p>\n It suggested phased implementation, proportionality measures and closer alignment of the rules more closely with international standards to reduce duplication and increase US firms\u2019 international competitiveness.<\/p>\n The interoperability question was also addressed by the International Corporate Governance Network\u2019s response<\/a>. It said the SEC should consult on proposals for targeted amendments including interoperability or substituted compliance for substantially equivalent reporting under the International Sustainability Standards Board<\/a> or other recognised regimes.<\/p>\n Investor pushback\u00a0<\/p>\n However, other investor responses pushed back\u00a0against the SEC\u2019s proposal.<\/p>\n They argued existing corporate disclosures do not address investors\u2019 information needs, with the variety of regulatory regimes leading to a fragmented landscape without a US baseline, and the lack of standardisation driving higher costs.<\/p>\n Investors also pushed back against the SEC\u2019s arguments that the rules go beyond its authority and are inconsistent with a registrant-specific, materiality-based approach.<\/p>\n In the New York State Comptroller\u2019s response<\/a>, Thomas DiNapoli said the Commission\u2019s rationale of corporate compliance cost savings \u201centirely ignores\u201d how much investors and companies have already invested and planned based on the expectations of a uniform federal standard.<\/p>\n \u201cAbandoning the rule now penalises those companies that proactively planned while improperly shifting the economic burden of data collection to investors, many of whom cannot assume that cost,\u201d DiNapoli said.<\/p>\n \u201cThe resulting vague and non-comparable disclosures may ultimately compromise investor protection and degrade the efficiency of our capital markets.\u201d<\/p>\n Meanwhile, CalSTRS<\/a> said without the rule \u201cinvestors will continue to face the same chronic data deficiencies\u201d that it laid out in a previous comment letter.<\/p>\n For example, the Californian pension giant said it currently spends approximately $2.2 million per year to access climate research and develop methods to estimate climate risks for assets across its portfolio.<\/p>\n \u201cApproximately 60 percent of the climate data we rely upon remains estimated by third-party research firms rather than reported directly by companies. Mandated disclosure would reduce this costly reliance on inconsistent estimates.\u201d<\/p>\n Earlier responses from fellow asset owners<\/a> CalPERS, AP7 and the New York City and Maryland comptrollers also raised cost concerns.<\/p>\n