Details of Long-Awaited Climate Risk Rule Expected This Week

Companies in all industries have concerns as they await the U.S. Securities and Exchange Commission’s (SEC) release of a climate risk rule that will require disclosures to investors on companies’ greenhouse gas emissions and details on how climate change could impact their business, Reuters reported.

Although it was originally reported that the SEC could release details of the proposed rule as early as Wednesday, March 16, it was later revealed the SEC plans to consider proposals for climate-risk disclosure rules at its March 21 meeting.. The commission began working on the measure last year as part of an effort by the Biden administration to address climate change and cut greenhouse gas emissions 50% in the U.S. by 2030, compared to 2005 levels.

Climate advocates want the SEC to create a rule that will require companies to reveal all the emissions they are responsible for. Corporate groups have vowed to push for a narrower final rule that they say will make it easier and less expensive to gather and report emissions data and will protect them from being sued over potential mistakes.

Release of the proposed rule has been stalled as the agency determined whether it should require companies to disclose not only their own greenhouse gas emissions, but also those generated by their suppliers and other partners.

Corporate greenhouse-gas emissions fall into three categories:

• Emissions a company directly generates
• Emissions it creates indirectly, such as by using electricity
• Emissions generated by a company’s suppliers and customers.

Companies say there is no agreed methodology for calculating emissions generated by their suppliers and partners and that providing that level of detail would be a heavy burden.