Matters To Consider for the 2026 Annual Meeting and Reporting Season: Disclosure Developments

Posted by Brian Breheny, Raquel Fox and Page Griffin, Skadden, Arps, Slate, Meagher & Flom LLP, on
Wednesday, January 14, 2026
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Brian V. Breheny, Raquel Fox, and Page Griffin are Partners at Skadden, Arps, Slate, Meagher & Flom LLP. This post is based on a Skadden memorandum by Mr. Breheny, Ms. Fox, Mr. Griffin, Andrew Brady, and Leo Chomiak.

Consider Trends in SEC Filing Reviews

The Staff of the Division of Corporation Finance (Staff) of the Securities and Exchange Commission (SEC) continues to review public company disclosures. Based on a recent survey[1], during the 12-month period ended June 30, 2025, the volume of Staff comment letters and the number of companies receiving comments declined, which was a reversal in the trend of increased comment letters issued in the prior two years.
Below is an outline of the recent comment letter trends and the Staff’s areas of focus in its filing reviews. Companies should consider these topics when preparing annual reports.

Comment Trends

Management’s discussion and analysis of financial condition and results of operations (MD&A) and non-GAAP financial measures remained the two most frequent areas generating Staff comments. Although the number of companies receiving comments declined, the number of companies that received Staff comments on MD&A and non-GAAP measures each increased by more than 10% compared to last year. Segment reporting and revenue recognition ranked third and fourth, respectively, once again in the top four most frequent sources for comment.
Other areas attracting frequent comment over the past year included (i) goodwill and intangible assets, (ii) inventory, (iii) costs of sales and (iv) business combinations.

Recent Areas of Focus

Below is a summary of the SEC staff’s noteworthy areas of focus.
MD&A
The Staff continues to focus on MD&A disclosures, most commonly about results of operations. The Staff’s comments on results of operations have continued to request that companies explain MD&A disclosures with greater specificity, including identifying and quantifying the impact of each positive or negative factor, and any offsetting factors, that had a material effect on results of operations.
Staff comments also focused on (i) liquidity and capital resources, including the effects of the macroeconomic environment, and (ii) critical accounting estimates. Staff comments on liquidity and capital resources often requested enhanced disclosures of (a) the availability of cash to fund liquidity needs, (b) underlying drivers contributing to changes in cash flows and (c) the trends and uncertainties related to meeting known or reasonably likely future cash requirements. Staff comments regarding critical accounting estimates frequently noted that companies’ disclosures were too general, and requested that companies provide a more robust analysis, consistent with the requirements set forth in Item 303(b)(3) of Regulation S-K. The Staff often emphasized that critical accounting estimates disclosures should supplement, not duplicate, the disclosures in footnotes to financial statements.
The Staff also continued to highlight the presentation of key performance indicators (KPIs) and operating metrics, including how they are calculated and period-over-period comparisons. Staff comments regularly scrutinized KPIs discussed in earnings releases and investor presentations and questioned how these compare to the information disclosed in MD&A.
Moreover, if estimates or assumptions underlie a reported metric or its calculation, companies should consider whether additional disclosure of that information is necessary for the disclosure of the metric to not be misleading.
Staff comments on MD&A reporting also addressed known trends or uncertainties, particularly those related to current or emerging developments in the macroeconomic environment such as inflation, tariffs, interest rates, geopolitical conflicts and supply chain issues.
Comments often requested additional disclosures to enhance an investor’s understanding of the impact of these developments on the company and the company’s response. As changing macroeconomic factors and other developments emerge, companies will need to provide transparent, company-specific disclosures about the anticipated impacts to help investors understand how and when companies may be affected.
Companies should:
  • Regularly reassess and update their MD&A disclosures to include current or emerging trends and uncertainties in the macroeconomic environment.
  • Continue to consider the 2020 Commission Guidance on Management’s Discussion and Analysis of Financial Condition and Results of Operations, particularly as it pertains to the disclosure and use of KPIs.
Non-GAAP Financial Measures
The Staff continues to focus on non-GAAP financial measures and compliance with the Staff’s Compliance and Disclosure Interpretations (C&DI) on non-GAAP financial measures, in certain cases resulting in requests to remove or substantially modify non-GAAP financial measures.
For example, Staff comments have addressed the undue prominence of non-GAAP measures that provide a discussion of non-GAAP financial measures at the beginning of MD&A before any discussion of results of operations have been reported using GAAP. Consistent with C&DI Question 102.10(a), Staff comments have also objected to companies presenting a full non-GAAP income statement as a form of reconciliation because such presentation gives the non-GAAP information undue prominence.
Staff comments also have addressed adjustments to non-GAAP measures that remove or exclude cash operating expenses that the Staff views as “normal” or “recurring” in the operation of a company’s business, and that in the Staff’s view, presented a misleading measure under C&DI Question 100.01.
Additionally, Staff comments focused on non-GAAP adjustments related to frequent restructuring and acquisition-related costs, where the Staff’s comments have asked companies to (i) detail the facts and circumstances supporting an adjustment for what could be a recurring cost and (ii) explain and quantify the components of these adjustments.
The Staff also continued to issue comments to determine whether certain KPIs are in fact non-GAAP measures and to request that companies present the most directly comparable GAAP financial measure with equal or greater prominence relative to the non-GAAP measure.
Although most of these comments address the use of non-GAAP measures in earnings releases and SEC filings, the Staff also reviews other materials, including company websites and investor presentations. Accordingly, companies should ensure that any public disclosures of non-GAAP financial measures comply with applicable SEC rules and Staff guidance.

Expected Areas of Focus in 2026

In 2026, we expect Staff comments to continue to focus on the reporting areas discussed above. The Staff may also expand the scope of its comments to address artificial intelligence or any new or amended SEC rules adopted in the upcoming year[2]. For additional discussion and governance considerations related to artificial intelligence, see the “Review and Update AI and Cyber-security Disclosures To Align With Emerging Trends” section of this checklist.

Consider SEC Staff Rulemaking Priorities

After a change in SEC leadership, rulemaking priorities shifted in 2025. Under SEC Chairman Paul Atkins, the SEC announced a new regulatory agenda intended to represent the agency’s “renewed focus on supporting innovation, capital formation, market efficiency and investor protection.” Notably, the new agenda removed a number of proposals related to environmental, social, and governance (ESG) considerations from the prior administration, including human capital management disclosure, corporate board diversity and conflict minerals reporting, and introduced a number of new areas of focus for rulemaking.
The following is a summary of key rulemaking initiatives, which will require the SEC to propose rules, seek public comment and then adopt final rules before they become applicable to public companies. Additionally, the effectiveness of any new rules that may be adopted are not expected until late 2026, at the earliest.
Semiannual financial reporting: Chairman Atkins has expressed support for President Donald Trump’s renewed call to end mandatory quarterly reporting in favor of semiannual disclosures and announced that the SEC is “fast-tracking” rulemaking in this area. During President Trump’s first administration, the SEC published a request for comment on earnings releases and quarterly reports and hosted a roundtable, but declined to pursue further reforms.
Rationalization of disclosure practices: The SEC is considering potential rule changes that rationalize disclosure practices to facilitate (i) material disclosure by companies and (ii) shareholders’ access to that information. For example, streamlining executive compensation disclosures is expected to be an area of focus, following the SEC’s roundtable discussion on executive compensation disclosure requirements with representatives from public companies, investors, industry groups and advisors in June 2025[3].
Shareholder proposals: The SEC is revisiting the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 (Exchange Act), which regulate the inclusion of shareholder proposals in company proxy materials for annual meetings of shareholders. Specifically, the SEC is considering potential rule changes to reduce compliance burdens for registrants and account for developments since the rule was last amended. In remarks at the University of Delaware’s John L. Weinberg Center for Corporate Governance, Chairman Atkins addressed the potential rulemaking relating to shareholder proposals on the SEC’s regulatory agenda, stating he has asked the Staff “to evaluate whether the [SEC’s] original rationale for adopting Rule 14a-8 in 1942 still applies today, especially in light of developments in the proxy solicitation process and shareholder communications generally over the last 80 plus years.” Potential rulemaking relating to the shareholder proposal rules and updated Staff guidance regarding Rule 14a-8 no-action requests are discussed in further detail in the “Review Shareholder Proposal Developments and New SEC Staff Guidance” section of this checklist.
Capital formation: Proposed rulemakings are expected to include new rules to (i) simplify the pathways for private companies to raise capital, (ii) modernize the shelf registration process to reduce compliance burdens, (iii) expand emerging growth company accommodations to include more issuers and (iv) simplify filer status categories generally to be less complex.
Cryptoassets and market structure: New rules are expected to clarify the regulatory framework for cryptoassets, including new and amended rules related to the offer and sale of cryptoassets that serve as exemptions and safe harbors[4].
Rule 144 safe harbor: The SEC is considering reproposing amendments to the Rule 144 safe harbor for resales of restricted and control securities to increase instances in which the safe harbor would be available. The SEC most recently formally addressed this topic through potential amendments to Rule 144, initially proposed on January 19, 2021. Although the scope of any potential regulatory action is uncertain, the SEC’s proposed amendments from 2021 (discussed in further detail in our client alert “SEC Proposes Amendments to Rule 144 and Form 144”) may provide insight about what to expect.
Foreign private issuers: As detailed in our client alert “SEC Requests Public Comment on the Definition of Foreign Private Issuer,” the SEC is considering potential amendments to the definition of foreign private issuer (FPI) following the agency’s June 2025 publication of a concept release soliciting public input in response to developments in the FPI population.

Assess Emerging Disclosure Trends

Overview

In recent years, the complexity and materiality of risks associated with tariffs, trade policies and government shutdowns has escalated. In 2025, these issues became increasingly relevant for many U.S. public companies, driven by ongoing geopolitical tensions, shifting U.S. trade policy and recurring threats of a federal government shutdown. Investors, regulators and other stakeholders expect company-specific information about how these external factors are impacting business operations, financial results and strategic planning.

Tariffs and Trade Policy: Evolving Disclosure Practices

A September 2025 survey of Form 10-Qs filed by Fortune 500 companies from April 1, 2025, through August 31, 2025, revealed a dramatic increase in the frequency and depth of disclosures related to tariffs and trade policy[5]. Nearly 90% of these filings referenced tariff- and trade-related concerns — almost double the amount of filings referencing these factors from the prior year. This surge reflects both the heightened impact of global trade tensions and companies’ efforts to provide investors with meaningful, “decision-useful” information.

Government Shutdown: Heightened Focus and Disclosure Expectations

The risk of a federal government shutdown has become a recurring trend, with significant potential implications for companies that rely on government contracts, regulatory approvals or federal agency operations. The SEC and investors expect companies to address the potential and actual impacts of a shutdown in their disclosures, particularly where such events already have or could materially affect business operations, liquidity or financial condition.

Disclosure Trends

  • Integration across multiple disclosure sections: Companies are increasingly disclosing tariff-, trade policy- and government shutdown-related information as risk factors, in forward-looking statement disclaimers, and in the Business and MD&A sections of periodic reports.
  • Tailored, company-specific narratives: Several impacted companies have replaced boilerplate language with tailored narratives that help investors better understand the unique risks and opportunities facing the company.

Disclosure Considerations

  • Materiality assessment: Companies should periodically assess the materiality of a government shutdown and tariff and trade policy developments on the company’s business, including both direct and indirect effects (e.g., supplier cost increases; customer demand shifts; and delays in contract awards, regulatory approvals or access to government services).
  • Forward-looking statements: Companies may want to include enhanced cautionary language regarding the uncertainty and potential variability of impacts from changes in trade policies and future shutdowns.
  • Operational response and mitigation strategies: When relevant, companies should disclose specific actions taken or planned to mitigate adverse effects, such as supply chain adjustments, contract renegotiations or changes in product pricing.
  • Consistency across filings: Disclosures in periodic reports, earnings releases, investor presentations and the proxy statement should be consistent and aligned, particularly when discussing the impact of a government shutdown and tariff and trade policy developments.
  • Outlook: Companies should also consider whether any assumptions made regarding forecasted results and future outlook are impacted by tariffs, trade policies or a future government shutdown.

Takeaway

As the regulatory and geopolitical environment continues to evolve, companies should carefully review their existing disclosures, expect continued scrutiny of their disclosures in these areas and be prepared to provide company-specific information to meet investor expectations.

Review and Update AI and Cybersecurity Disclosures To Align With Emerging Trends

Overview

The sudden evolution of artificial intelligence (AI) and the increasing sophistication of cybersecurity threats have made these topics more central to public company disclosure and governance. Over the past year, regulatory expectations, investor scrutiny and stakeholder demands have driven pointed changes in how companies approach, oversee and disclose AI and cybersecurity risks and opportunities.

AI Disclosure Trends

Board and Committee Oversight of AI
AI has become a prominent feature in boardroom discussions and public disclosures. In 2025, nearly half of Fortune 100 companies specifically cited AI risk as part of the board’s oversight of enterprise risk, a threefold increase from the prior year[6]. Disclosures increasingly highlight the board’s role in overseeing both the risks and opportunities associated with AI, including the adoption of responsible AI frameworks, ethical guidelines and the integration of AI into core business processes. Some companies have established dedicated board-level committees or working groups to address AI governance, while others have formalized AI oversight responsibilities in committee charters.
Also, disclosure of AI expertise as a desired or actual qualification for directors has significantly increased. In 2025, 44% of Fortune 100 companies referenced AI in director biographies or board skills matrices, up from 26% the previous year[7]. Some companies are recruiting directors with commercial experience in AI development and others are investing in ongoing board education on AI topics. Related disclosures often describe director participation in AI-focused trainings and external certifications.
Periodic Reports
AI is now routinely discussed in the Business section of Form 10-Ks, with approximately 84% of Fortune 500 companies discussing AI in their annual reports and 42% of such disclosures appearing in the Business section[8]. Disclosures cover a range of topics, including the use of AI to enhance efficiency, drive innovation and improve customer experience, as well as the challenges of integrating AI into legacy systems and business models.
Risk factor disclosures related to AI have become nearly universal among large public companies. In 2025, 87% of large companies included AI-related risks in their Form 10-Ks, with nearly 30% providing a stand-alone AI risk factor[9]. For example, commonly disclosed risks include:
  • Cybersecurity threats: the use of AI by threat actors to develop sophisticated cyberattacks, including deepfakes and social engineering.
  • Regulatory and legal compliance evolution: uncertainty regarding evolving AI regulations at the federal, state and international levels.
  • Operational and strategic risks: challenges in executing AI initiatives, potential defects or vulnerabilities in AI tools, and the risk of falling behind competitors.
  • Reputational and ethical risks: potential for biased or erroneous AI outputs, misuse of AI by employees or third parties, and public backlash.
  • Intellectual property risks: infringement claims arising from AI-generated content or the use of third-party data in AI models.

Cybersecurity Disclosure Trends

Board and Committee Oversight of Cybersecurity
Cybersecurity oversight remains a top board and audit committee priority. In 2025, 96% of Fortune 100 companies disclosed that at least one board-level committee was charged with cybersecurity oversight, with the audit committee serving as the primary committee in 78% of cases[10]. Disclosures increasingly describe the frequency and format of management reporting to the board, the roles of the chief information security officer (CISO) and other executives, and the use of external advisors or consultants.
Disclosing cybersecurity as a desired or actual area of board expertise is also a popular trend. In 2025, 86% of Fortune 100 companies referenced cybersecurity expertise in director biographies or board skills matrices[11].
Periodic Reports
The SEC’s final rules on cybersecurity disclosures, effective since late 2023, require companies to provide detailed information about their cybersecurity risk management, strategy and governance. In 2024, companies expanded their disclosures to address the following[12]:
  • Risk management processes. 67% of Fortune 500 companies include a description of cybersecurity frameworks (i.e., NIST CSF, ISO 27001) used to assess and manage cybersecurity risks.
  • Incident response and preparedness. 65% of Fortune 500 companies reference response readiness plans.
  • Employee training and awareness. 64% of Fortune 500 companies disclosed education and training efforts to mitigate cybersecurity risks.

SEC Developments

On February 20, 2025, the SEC announced the creation of the Cyber and Emerging Technologies Unit to help combat cyber-related misconduct and to protect retail investors from bad actors in the emerging technologies space. According to Commissioner Mark Uyeda, who was acting chair of the SEC at the time, “The new unit will also allow the SEC to deploy enforcement resources judiciously” and “will not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow. It will root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies.” This unit refocuses the former Crypto Assets and Cyber Unit, which was expanded in size in May 2022. Former Chairman Gary Gensler explained that “[b]y nearly doubling the size of this key unit, the SEC will be better equipped to police wrongdoing in the crypto markets while continuing to identify disclosure and controls issues with respect to cybersecurity.”
Additionally, on April 9, 2025, the SEC and the Department of Justice (DOJ) filed parallel actions against the founder and former CEO of a company that develops mobile apps, alleging that he made false and misleading statements to investors about the company’s purported AI technology.
According to the SEC’s complaint, between spring 2019 and December 2022, the former CEO marketed the company as a mobile shopping application that used AI to process transactions, allegedly telling investors that the company’s application used automated technology that relied on AI to complete purchases made through the app without human involvement. In reality, the company relied in large part on contract employees to manually input orders placed by users on the app; the company’s success rate in completing transactions was lower than what he represented to investors; and the company’s app was not able to use AI to complete purchases. The SEC’s complaint charged the former CEO with violations of Section 17(a) of the Securities Act of 1933 and of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
Given this enforcement action, companies should avoid overstating the benefits of AI in their businesses and should carefully assess whether any of their claims about their development or reliance on AI could be considered misleading.

Practical Considerations and Best Practices

Disclosure Controls and Procedures
Companies should review and enhance their disclosure controls and procedures to ensure that AI and cybersecurity risks are identified, assessed and disclosed in a timely and accurate manner. This should include coordination among legal, IT, risk and business teams, as well as regular updates to reflect evolving risks and regulatory expectations.
Tailored, Useful Disclosures
Disclosures should be tailored to the company’s specific facts and circumstances, avoiding boilerplate language and providing sufficient detail for investors to understand the company’s approach to AI and cybersecurity. Companies should explain the rationale for board and committee oversight structures, the integration of AI and cybersecurity into business strategy, and the steps taken to mitigate material risks.
Ongoing Board Education and Stakeholder Engagement
Boards should consider implementing (or prioritize existing) education on AI and cybersecurity topics, leveraging internal and external expertise. Companies should also engage with shareholders and other stakeholders to understand their expectations and concerns regarding technology governance and risk management.
Effective AI Governance
Companies should establish a robust, principles-based governance framework that enables innovation while managing legal, regulatory and ethical risks. Effective AI governance should be pragmatic — supporting business objectives and innovation — while remaining flexible to adapt to rapidly evolving technologies and regulatory landscapes. Key elements of responsible AI use include:
– Transparency and record-keeping. Maintaining detailed records of AI-related activities is essential. This includes documenting prompts, sources and documents used in AI-powered research, as well as tracking human oversight
in drafting and disclosure processes. Transparency supports accountability and facilitates regulatory compliance, especially in the event of audits or investigations.
  • Human oversight and validation. AI-generated outputs should never be relied upon without human review. Companies remain liable for any misrepresentations or inaccuracies in public disclosures, regardless of whether the inaccuracies originated from AI tools. Human oversight is critical, particularly for legally sensitive statements or disclosures that could impact the company’s risk profile or reputation.
  • Data security and confidentiality. Companies should maintain strict controls over the input and handling of confidential or sensitive information. Only enterprise-approved, secure AI tools should be used, and confidential data should never be entered into unvetted platforms. This reduces the risk of data breaches, inadvertent disclosure of material nonpublic information (MNPI), and regulatory violations.
  • Accuracy and reliability. AI outputs must be validated for accuracy, especially when used in research, drafting or note-taking. Users should not assume that AI-generated information is correct — plausible-sounding content can be inaccurate or misleading. Companies should pay special attention to industry-specific terminology, names and acronyms, which AI tools may misinterpret.
  • Compliance with retention and notice policies. When using AI for tasks such as meeting transcription or note-taking, companies should adhere to established data retention policies and provide appropriate notice to participants. Storing AI-generated records beyond permitted periods or failing to inform stakeholders of AI use can create legal and compliance risks.

Takeaway

AI and cybersecurity are becoming more prominent in public company disclosure and governance. As regulatory requirements and stakeholder expectations continue to evolve, companies should proactively assess and enhance their oversight structures, risk management practices and public disclosures in these areas. Robust, transparent and tailored disclosures help maintain investor confidence as companies seek to meet the challenges of the digital age.

Revisit Insider Trading Policies

In December 2022, the SEC adopted amendments intended to address what the agency perceived as abusive practices relating to Rule 10b5-1 trading plans, certain equity awards and gifts of securities. Notably, the amended rules require companies to file copies of their insider trading policies and procedures as exhibits to annual reports on Form 10-K or Form 20-F. The rules became effective during last year’s reporting cycle and companies filed their insider trading policies as exhibits for the first time.
For the next annual reporting cycle, companies should consider any necessary updates to their insider trading policies, taking into account market practices and the company’s individual circumstances. Below are key provisions companies should revisit when reviewing their policies.

Blackout Periods

Because the announcement of a company’s quarterly financial results almost always has the potential to materially impact the market for the company’s securities, companies should consider implementing a quarterly blackout period during which persons subject to the blackout may not trade in the company’s securities. In setting a blackout period, companies must consider both the appropriate time frame and scope of individuals to include.
Quarterly Trading Windows
Based on insider trading policies filed by companies in the S&P 500 index, companies typically start their quarterly blackout periods on or between the first and 15th day of the last month of the quarter, and commonly open the trading window after the first trading day following release of the company’s earnings. However, trading windows vary from industry to industry, and companies ultimately should consider what window is most appropriate for their individual circumstances. Generally, the blackout period should begin when the company’s quarterly results become sufficiently certain and visible internally.
Persons Subject to Quarterly Blackout Periods
Quarterly blackout periods typically apply to (i) directors, (ii) officers subject to Section 16 of the Exchange Act and (iii) designated employees who frequently have access to material nonpublic information about the company. However, in certain circumstances, applying quarterly blackout periods to all employees may be appropriate — this is common where there is broad access internally to financial information or the company has a small number of employees.
Transactions on Behalf of the Company
Item 408(b)(1) of Regulation S-K requires companies to disclose in their annual reports whether the company has adopted insider trading policies and procedures governing trading in the company’s securities by the company itself. Companies that have not adopted policies or procedures addressing company trading should consider addressing it in their insider trading policies. This approach can be accomplished by stating in the insider trading policy that the company’s policy is to comply with applicable securities laws concerning trading in company securities on the company’s behalf.
Shadow Trading
In April 2024, a jury in federal court found a former executive civilly liable for insider trading. In the first-of-its-kind case, the SEC argued that the executive engaged in “shadow trading.” More specifically, the SEC argued that the executive used material nonpublic information about the not-yet-public acquisition of his employer to trade in securities of another company with which he had no relationship, on the assumption that the acquisition would increase the stock price of the other company. In September 2024, a federal court upheld the jury’s verdict, and the case is currently on appeal to the U.S. Court of Appeals for the Ninth Circuit.
In light of this case, companies should consider addressing in their insider trading policies trading in other companies’ securities on the basis of material nonpublic information obtained in the course of an individual’s position with the company. This prohibition could be applicable to all other companies or a narrower set, such as the company’s business partners and competitors. Alternatively, rather than state that shadow trading is a violation of the company’s policy, the policy can emphasize that shadow trading is a violation of the law.
Treatment of Gifts
The SEC also cited concerns with potentially problematic practices involving gifts of securities, such as making stock gifts while in possession of material nonpublic information or backdating stock gifts to maximize the associated tax benefits. The SEC noted that a scenario in which an insider gifts stock while aware of material nonpublic information and the recipient sells the gifted securities while the information remains nonpublic and material is economically equivalent to a scenario in which the insider trades on the basis of material nonpublic information and gifts the trading proceeds to the recipient.
Accordingly, companies should consider including specific companies can require advance clearance for gifts by persons who are subject to quarterly blackout periods since those individuals are generally more likely to be in possession of material nonpublic information. Alternatively, a company can treat gifts in the same manner it treats ordinary open market purchases and sales, which would prohibit gifts of securities by anyone subject to the policy while subject to a blackout period or in possession of material nonpublic information. Based on insider trading policies filed by companies in the S&P 500 index, companies commonly take this second approach, treating gifts the same way the company treats open market transactions.

Consider Recent Developments in Preparing Climate-Related Disclosures

Although companies no longer need to prepare for implementation of the SEC climate disclosure rules[13] following the SEC’s withdrawal of defense in the related litigation[14], companies should continue to consider the evolving regulatory landscape in preparing climate-related disclosures.

Climate-Related Disclosure and Sustainability Reports Trends

While the current U.S. regulatory environment no longer prioritizes climate-related disclosures at the federal level, many companies still publish stand-alone ESG or sustainability reports and other climate-related disclosures outside of SEC filings, including in response to state or other countries’ disclosure requirements.
However, the nature and timing of sustainability reports has changed. For example, 74% (368) of S&P 500 companies published sustainability reports in both 2024 and 2025, and nearly half (48%) released their 2025 reports at a later date in the year than they did in 2024. The average delay was around five months[15]. Further, the titles of such reports shifted away from “ESG” toward “Sustainability.” Also companies either removed or reframed the term “DEI” throughout such reports[16]. For example, only 9.1% of S&P 500 companies that published a report this year included “ESG” in the title, compared with 24.8% in 2024 and 35% in 2023[17]. These trends are largely due to companies monitoring disclosures due to shifts in the regulatory and political landscape. For additional considerations in preparing climate-related disclosures, see our November 5, 2024, publication “Enhancing Controls and Procedures for Climate-Related Disclosures.”
Within SEC filings, specifically Form 10-K, most S&P 500 companies mentioned climate-related information, consistent with the number in both 2023 and 2024[18]. While most companies continue to mention climate-related information in Item 1A. Risk Factors or Item 1. Business, increased disclosures of such information also appeared in Item 7. MD&A and Item 8. Financial Statements[19].

California Climate Disclosure Rules

Companies that are subject to California’s Senate Bill 261, Greenhouse Gases: Climate-Related Financial Risk (SB 261) are no longer required to publish their climate related financial risk reports by the January 1, 2026, deadline. SB 261 was enjoined by the U.S. Court of Appeals for the Ninth Circuit, pending the ongoing litigation (as discussed in our November 21, 2025, client alert “Ninth Circuit Enjoins California Corporate Climate Risk Disclosure Law, but the Waiting Game Continues”). A company may now voluntarily post its report on the California Air Resources Board’s (CARB’s) online database. If a company chooses to post to the CARB database, the company should also post the report on its corporate website. CARB also formally announced that it would not enforce SB 261 in light of the injunction and that the board will provide further information, including an alternative date for reporting, as appropriate, after the appeal is resolved[20].
The Ninth Circuit, however, declined to enjoin Senate Bill 253, Climate Corporate Data Accountability Act (SB 253), which will require certain companies to publicly disclose greenhouse gas (GHG) emissions data, starting in 2026[21].
In addition, Assembly Bill 1305, Voluntary Carbon Market Disclosures Act (AB 1305) remains in effect for a company making climate-related claims or purchasing/using carbon offsets sold in California to publicly disclose on the company website detailed information related to the methodology, verification and/or carbon offsets used to support climate-related claims. For additional information comparing the three California disclosure laws, see our October 28, 2024, client alert “State of Play: California Amends Climate Disclosure Rules.”

CSRD

While the European Union’s disclosure rules under the Corporate Sustainability Reporting Directive (CSRD) initially will apply only to EU-incorporated companies, for fiscal years starting on or after January 1, 2028, non-EU companies must report if they have a significant presence in the EU (defined by minimum EU revenues and asset thresholds)[22]. The EU is finalizing the thresholds for determining which non-EU companies will be required to produce CSRD reports.

1See Ernst & Young’s SEC Reporting Update “Highlights of Trends in 2025 SEC Staff Comment Letters” (Sept. 11, 2025).(go back)

2See SEC’s Agency Rule List – Spring 2025.(go back)

3For more information, see the “Track Potential Updates to Compensation Disclosure Rules” section of this checklist.(go back)

4For more information on the SEC’s cryptoasset-related developments and potential rulemakings, see our August 8, 2025, client alert “A Closer Look at the Trump Administration’s Comprehensive Report on Digital Assets,” and April 30, 2025, client alert “SEC Moves Quickly To Create a Regulatory Framework for Cryptocurrencies and Reconsider Its Rules and Guidance.”(go back)

5See KPMG report “Effects of Tariffs on SEC Quarterly Disclosures” (Sept. 2025).(go back)

6See EY report “Cyber and AI Oversight Disclosures: What Companies Shared in 2025” (Oct. 2025).(go back)

8See Deloitte report “Disclosure Trends From the 2024 Reporting Season” (April 2025).(go back)

10See EY report “Cyber and AI Oversight Disclosures: What Companies Shared in 2025” (Oct. 2025).(go back)

12See Deloitte report “Disclosure Trends From the 2024 Reporting Season” (April 2025).(go back)

13See our March 8, 2024, client alert “SEC Adopts New Rules for Climate-Related Disclosures.”(go back)

14On March 27, 2025, the SEC voted to end its defense of the climate disclosure rules in the ongoing litigation in the U.S. Court of Appeals for the Eighth Circuit. In April 2024, the SEC voluntarily stayed the effectiveness of these pending judicial review.(go back)

15See DiversIQ, “2025 Sustainability and Human Capital Disclosure Trends.”(go back)

18See CAQ, “Analysis of Climate-Related Information in S&P 500 Companies’ 10-Ks.”(go back)

20For additional information of CARB resources, see the board’s website.(go back)

21We discussed the proposed legislation in our October 28, 2024, client alert “State of Play: California Amends Climate Disclosure Rules” and our September 26, 2023, client alert “California Poised to Adopt Sweeping Climate Disclosure Rules.”(go back)

22See our April 8, 2025, client alert “EU Parliament Votes To Delay Implementation of Sustainability Reporting and Due Diligence Obligations.”(go back)