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Mike Smith
May 9, 2023
Unless you work in sustainability, you may be unaware of a rule-making that the Securities and Exchange Commission (SEC) is working on around the disclosure of climate related emissions for publicly traded companies. In short, the SEC Climate Disclosure Rule is expected to require every company under their purview to disclose direct and consumed energy-related emissions – known as Scope 1 & Scope 2 emissions – and that companies of sufficient size and those with “material” levels also disclose the value chain-related emissions known as Scope 3. This rule was expected last month, so it could be released any day.
If you’re a cynic, it would be easy to dismiss the whole thing as political and subject to change with changing political leadership. But you’d be missing that the SEC rule is already approaching irrelevancy – 70% of affected companies surveyed by PwC stated that they are going to track emissions independently of whether the rule goes through or not. That includes companies like Anheuser-Busch InBev, Microsoft, General Motors, and more. Companies that aren’t included in the potential rule are also moving in that direction, too. Just in the past few days, outdoor recreation leader REI – a non-traded co-op – announced that it would measure the emissions from its supply chain and prioritize purchases from those who are reducing emissions. The famous auction house Christie’s has been doing it for years.
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