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SEC may remove Scope 3 emission requirements from disclosure rules (2024)
| Environmental, social, and corporate governance |
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Axios reported last week that the Securities and Exchange Commission (SEC) may be preparing to drop the Scope 3 emissions reporting requirements—which proposed requiring public companies to report on emissions generated in their supply chains—from its new climate disclosure rules, with a final decision expected next month:
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The Securities and Exchange Commission is said to be scrapping plans to require that public companies disclose carbon emissions from their supply chains and end users as part of its long-awaited disclosure rules. Why it matters: Scope 3 emissions, as they're called, are often the largest source of carbon emissions for companies, and especially in the fossil fuel industry. The regulator's potential move is part of a broader retreat — or at least rethink — within the financial and corporate sector on environmental and social issues. Politics is playing a major role in the backlash.[1] |
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Politico reported on the rumors that the SEC will remove Scope 3 emissions standards from the rules and suggested the agency might also reduce Scope 1 and Scope 2 disclosure standards, which refer to emissions reporting requirements related to a company’s operations and energy usage:
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If finalized, the scaled-back rule could represent a major victory for groups like the U.S. Chamber of Commerce and the American Farm Bureau Federation that have questioned the legality of the proposal and the agency’s authority to compel such disclosures. … In the latest draft of the landmark rule, the SEC has dropped a mandate that certain large companies report to investors information about the emissions generated by their suppliers and customers, known as Scope 3, said the person, who was granted anonymity to discuss non-public information. The Wall Street regulator is also likely to ease proposed reporting requirements related to emissions generated directly from a company’s operations as well as its energy usage, known as Scopes 1 and 2, the person said. The person added that the agency has hinted that the disclosures could be tied to how important, or material, the information would be to the company’s investors.[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
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