To keep or not to keep: The fate of scope 3 emissions in SEC’s climate disclosure rule
/“Given all of the pushback the agency has received over its proposed rule, particularly scope 3 reporting requirements, experts are uncertain if scope 3 will make the final cut.
When the Securities and Exchange Commission released its climate disclosure proposal in March 2022 mandating that companies describe their levels of greenhouse gas emissions and strategy toward reducing climate risk on their Form 10-K, the announcement was met with much criticism from some Republican lawmakers, industry organizations and dozens of state attorney generals.
The common denominator driving most of these complaints: a requirement for companies to disclose their scope 3 emissions — emissions that are not directly produced by the company itself or assets owned or controlled by the company, but by entities that are part of the company’s value or supply chain, according to the Environmental Protection Agency. Even though corporations may not directly produce these emissions, scope 3 emissions often represent the majority of their total greenhouse gas emissions.
Since unveiling its climate disclosure rule, the SEC received over 16,000 public comments to the proposed rule, causing the agency to repeatedly postpone its release date, most recently missing an expected October release, as it reviewed these comments.
Last month, the agency revealed it plans to finalize the long-awaited rule in April 2024, but provided no further insight into what the ultimate version of this rule would entail, and whether it would include any amendments to scope 3 disclosure requirements.
Given all of the backlash, experts and some corporations doubt the requirements will make the final cut at this point.”
Quote from www.esgdive.com