Emissions Disclosure Rule Sparks Scope 3 Concerns

David Lynn spoke to Agenda about the Securities and Exchange Commission's (SEC) new climate disclosure rule proposal, which will not reduce investors' demands for more detailed emissions data in the short or long term.

The proposed rule would require companies to disclose Scope 3 emissions – emissions that come from companies' supply chains, use of products, and other emissions stemming from the value chain – if the emissions are material or if they are part of the company's emissions reduction targets.

"[The SEC] tried to propose an approach that will be more palatable to companies, but overall, I think that aspect of the proposal is going to be controversial and lead to criticism, and may lead to litigation," David said. "It's a hard nut to crack for companies because [Scope 3 emissions are] dealing with things completely outside of [companies'] control and are difficult to measure."

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