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Prof. Aseem Prakash in Forbes, "Progress, Retreat Or Compromise: SEC Climate Disclosure Rule"

Submitted by Stephen Dunne on March 11, 2024 - 10:10am

Prof. Aseem Prakash and colleague Prof. Nives Dolšak write in Forbes that climate disclosures required of public companies should be implemented incrementally as gathering the data is often difficult and contentious,

Policy changes in contentious situations take place incrementally. The SEC's recent rule requires publicly traded firms to disclose the impact of climate change events (droughts, floods, hurricanes, etc.) and policy and legal issues (such as litigation) on their finances. The SEC rule also requires firms to partially disclose their contribution to climate change. While firms need to disclose their Scope 1 and  Scope 2 emissions, the SEC rule does not require firms to disclose Scope 3 emissions that are generated by their supply chains and consumers who use their products.  For the climate movement, including Scope 3 emissions is essential because they constitute about 75% of corporate emissions. While firms complain about Scope 1 and Scope 2 disclosures, Scope 3 is most contentious because firms believe that this information is difficult to collect from their supply chains that span multiple countries. The SEC climate disclosure rule has sought a middle path to climate disclosures. This is the theory of change of policy incrementalism that those seeking climate progress should probably embrace.

Please link here for the full article.

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