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Limitations to Scope 3 Reporting
I have submitted three comments to the SEC regarding their proposed rule to do with climate-related disclosures to investors. They are:
A theme of all three comments is that Scope 3 reporting is too vaguely defined. Therefore the SEC should focus on Scopes 1 and 2, and worry about Scope 3 later.
Yesterday the web site CFO Dive and the Wall Street Journal reported the following.
The Securities and Exchange Commission (SEC) will not require all publicly traded companies to disclose the carbon emissions from their vendors, suppliers and other third parties across their supply chains, but will limit the mandate to businesses that have already set goals for curbing such “scope 3” emissions, SEC Chair Gary Gensler said.
“If a company decides, ‘I have made no commitment to the future on that and it’s not material to my investors and my operations under the Supreme Court test of materiality,’ you don’t have a disclosure obligation on scope 3,” Gensler said Tuesday.
“But if you have made a commitment to the public about the future path [regarding scope 3 emissions], then your investors want to understand how you’re managing that,” he said during a webcast hosted by The Wall Street Journal.
In summary, the SEC has adjusted the rule to minimize Scope 3 reporting.