SEC Mandates Disclosure of Greenhouse Gas Emissions for Some Companies

SEC Finalizes Climate Disclosure ‌Rules, Scaling Back Initial Proposal

The US Securities and Exchange Commission (SEC) has adopted⁤ new climate disclosure rules, which require companies​ to share information about their greenhouse gas emissions and the climate-related⁣ risks they face. However, the final rules are less comprehensive than the SEC’s⁤ initial proposal, which would have mandated companies‍ to disclose pollution from their supply chain and the use ‍of their products.

Partial ⁤Victory for Both Environmental Advocates and Trade Groups

The ⁢scaled-back ⁣rules represent a partial victory for both environmental advocates and trade groups that opposed the SEC’s initial proposal. While the new rules provide more⁢ transparency than ever before on a company’s ⁤environmental impact, climate advocates argue that there is still room for improvement.

“You can’t manage the problem if you first can’t measure the problem.”

Steven Rothstein, managing‌ director of the⁢ Ceres Accelerator for‍ Sustainable Capital Markets, believes that the rule will ensure more consistent⁢ information ‌for investors, which⁢ is crucial‌ for capital markets. He emphasizes that ⁣investors have been requesting this information because they recognize ​that climate⁢ risk is financial risk.

Measuring a Company’s Carbon Footprint

A company’s carbon footprint is measured ‌in three ‘scopes.’ The most contentious scope, which includes indirect supply chain and consumer emissions, has been excluded ‍from the final rules. This decision comes after significant pushback from trade groups and companies, who argued that ‍measuring these emissions would be too burdensome.

Despite the scaled-back rules, the SEC’s decision marks a significant step forward in climate disclosure. Prior to California passing‍ its own climate disclosure rule, the US was considered “a more wide-sweeping”⁢ in terms of climate reporting. According to a report by the Governance & Accountability Institute, more ‍than 80 percent of the 1,000 largest listed companies in the US already share climate-related information in their ESG reports.