The US Securities and Exchange Commission (SEC) has decided to remove some of the ambitious greenhouse gas emission disclosure rules from its corporate climate risk regulations.
One of these rules required US-listed companies to disclose Scope 3 emissions, but this requirement has been dropped from the original draft published in March 2022.
Removing these rules would hinder President Joe Biden’s efforts to tackle climate change through federal agencies. Biden, a Democrat, faces pressure from fellow party members to accelerate action.
Scope 3 emissions include greenhouse gases like carbon dioxide from a company’s supply chain and customer product consumption.
For many businesses, Scope 3 emissions comprise over 70% of their carbon footprint, reports the Deloitte consulting firm.
Also read: Investors grapple with the Scope 3 emissions in climate finance
If approved, the new draft would benefit numerous corporations and their trade groups that campaigned to weaken the rules.
However, it would differ from European Union regulations, which mandate Scope 3 disclosures for large companies starting this year. This could complicate compliance for some global corporations.
The SEC’s initial draft suggested compulsory disclosure of emissions under Scope 1 and Scope 2, for which companies bear more direct responsibility.
