Since many of you may, like me, be having the vapors waiting for the SEC to finally divulge the new climate disclosure rules, I thought I'd share this latest scoop from Reuters. According to Reuters, not only is the SEC dropping the mandatory Scope 3 requirement, it is also moderating the requirements for disclosure of Scopes 1 and 2.
Just as a refresher, in the proposal, the SEC defined the "scopes," based on the GHG protocol, as follows:
- "Scope 1 emissions as direct GHG emissions from operations that are owned or controlled by a registrant;
- Scope 2 emissions as indirect GHG emissions from the generation of purchased or acquired electricity, steam, heat, or cooling that is consumed by operations owned or controlled by a registrant; and
- Scope 3 emissions as all indirect GHG emissions not otherwise included in a registrant's Scope 2 emissions, which occur in the upstream and downstream activities of a registrant's value chain. Upstream emissions include emissions attributable to goods and services that the registrant acquires, the transportation of goods (for example, to the registrant), and employee business travel and commuting. Downstream emissions include the use of the registrant's products, transportation of products (for example, to the registrant's customers), end of life treatment of sold products, and investments made by the registrant."
According to Reuters, and "people familiar with the matter," in the final rules, the SEC has "softened requirements for disclosures of Scopes 1 and 2 emissions....The initial proposal made these disclosures mandatory. But the draft rule now under consideration would compel such disclosures only if companies deem they are material, meaning in some instances they might not be reported at all, the people said."
Of course, we won't know whether the "people familiar with the matter" are actually correct until the meeting on Wednesday, so stay tuned.
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