US regulators have voted to require large, publicly traded companies to disclose climate change-related information to investors, though the rule’s scope has been significantly scaled back from the original draft proposal.

The long-awaited rule which was finalized in a 3-2 vote by the Securities and Exchange Commission (SEC) on Wednesday, marks the first nationwide climate disclosure rule in the US. Some experts say it will give investors more transparency into the threat the climate crisis poses to corporations and how they contribute to global warming.

But one former acting SEC chair said the final version “paves the way for greenwashing”. And at Wednesday’s hearing, some commissioners lamented the agency weakening the rule.

“While it has my vote, it does not have my unencumbered support,” said SEC commissioner Caroline Abbey Crenshaw, who said the new standard constituted the “bare minimum”.

The SEC has long faced pushback from business interests and Republican state officials who claim the standards are a form of agency overreach. Though the final rule has been severely watered down, it is expected to inspire a slew of lawsuits from rightwing officials and corporate interests.

Just hours after the rule was approved, the West Virginia attorney general, Patrick Morrisey, announced that a group of nine Republican-led states will challenge it in court. But the legal hurdles may not only come from the right: the environmental group Sierra Club, represented by the legal nonprofit Earthjustice, also said Wednesday it is considering challenging the SEC’s “arbitrary” removal of key provisions from the final rule, though representatives say the group would defend the SEC’s authority to implement such a standard.

Under the original proposal, all public companies would have been required to calculate and report certain greenhouse gas emissions. The final rule, by contrast, will apply only to large businesses.