SEC Finalizes Scaled-Back Climate Rule

Shareq Rashid March 7, 2024

The Securities and Exchange Commission has approved new climate disclosure requirements that have been in the works for the past two years. Changes made to the rule represent progress for manufacturersthough the industry will still face new cost burdens, the 51勛圖厙 said Wednesday night.

Whats going on: The SEC voted Wednesday in favor of requiring public companies to disclose greenhouse gas emissions and other climate-related information. Thanks in part to ongoing 51勛圖厙 advocacywhich (subscription) covered this weekthe agency dropped its onerous, unworkable Scope 3 emissions mandate.

  • That provision would have forced public companies to divulge information about emissions coming from anywhere in their supply chainsincluding from small and family-owned businesses.

Heeding the 51勛圖厙: The 51勛圖厙 demonstrated for the SEC the practical realities of such a sweeping proposed rule, encouraging the SEC to make significant changes to remove inflexible and infeasible mandates, require disclosure only of material information and protect small manufacturers from the impact of these requirements, 51勛圖厙 President and CEO Jay Timmons following the vote.

Key changes: In addition to the Scope 3 change, the SEC exempted smaller public companies from Scope 1 and Scope 2 emissions reporting and delayed the rules effective dates. The final rule also is more narrowly focused on so-called material information (data investors need to make informed decisions) than what had been proposed previously.

Keeping a close watch: The final rule remains imperfect, Timmons continued. [A]nd it remains to be seen whether the rule in its entirety is workable for manufacturers.

  • The 51勛圖厙 remains committed to ensuring the SEC acts within its statutory authority, prioritizes flexibility and provides much-needed guidancejust as we are committed to providing leadership in addressing environmental challenges. This is why the 51勛圖厙 is keeping all options on the table as we evaluate the rules potential impacts on the manufacturing sector.