Should Amazon.com and Walmart be forced to tell investors how much pollution all their suppliers send into the atmosphere? Should ExxonMobil be responsible in accounting for the emissions that auto drivers rack up?
Internal debate around the inclusion of Scope 3 and a mixed bag of comments on the issue has reportedly slowed the rulemaking. Still, big moves in climate-change regulation has increasingly gained value as a centerpiece of the Biden administration’s efforts to slow the planet’s rising temperature, particularly as other White House clean-energy initiatives have stalled in Congress.
What’s yet to be seen is if the U.S. follows the lead of the U.K., which plans to require climate disclosure starting in April, and the European Union, which already has reporting rules in place. Uber Technologies Inc. UBER, +1.55% was one of the first companies to submit a comment letter to the SEC. It is urging the agency to create a comparable reporting system by incorporating disclosure and accounting standards from two nonprofit organizations—the Task Force on Climate-Related Financial Disclosures, which was created by the Financial Stability Board, and the Sustainability Accounting Standards Board.
Scope 3 debate Many businesses have pushed for the regulations to exclude disclosing Scope 3 emissions. Scope 3 are the emissions throughout a company’s supply chain, including its customers. The Greenhouse Gas Protocol estimates between 80%-90% of an organization’s total emissions are related to Scope 3.
“Our work on quantifying the scope and scale of risks… has made it clear that climate-change impacts are material for issuers of public securities and other businesses,” McGlinchey said.
'Environmental Issues and Stock Returns.' Our 2015 report quantifies the impact environmental issues have on company stock prices.
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