US SEC Scraps Some of Its Most Ambitious Greenhouse Gas Emission Disclosure Requirements From Draft Climate Rules: Report

By Jace Dela Cruz

Feb 23, 2024 03:08 AM EST

The US Securities and Exchange Commission (SEC) has reportedly junked some of the most demanding greenhouse gas emissions disclosure requirements from corporate climate risk rules it is readying to implement. 

People familiar with the matter told Reuters on Thursday that the SEC removed a requirement for US-listed firms to disclose so-called Scope 3 emissions that was included in its original draft of the rules published in March 2022.

(Photo : digifly840 from Pixabay)

US SEC Drops Scope 3 Emissions From Draft Climate Rules

The exclusion of Scope 3 emissions from the draft climate regulations would reportedly be a blow to President Joe Biden's agenda to address climate change threats.

Scope 3 emissions covered the greenhouse gases, such as carbon dioxide, emitted in the atmosphere from a company's supply chain and consumption of its products by consumers. 

According to consulting firm Deloitte, these emissions typically constitute a significant portion of a company's carbon footprint, often exceeding 70%.

If adopted, the new regulations would represent a victory for many corporations and their trade associations that pushed to water down these rules.

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Mandatory Disclosure

The original draft by the SEC proposed mandatory disclosure of Scope 1 and Scope 2 emissions, for which companies bear more direct responsibility. 

Some lobbyists urged the SEC to require such disclosures only if they significantly impact a company's operations. However, the latest draft's stance on the threshold for Scope 1 and Scope 2 disclosures remains unclear.

Once the SEC finalizes the draft, it will be subject to a vote among its five commissioners. The timing of the vote is currently unclear, and revisions to the draft may occur before it takes place.

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