Every year, public companies in the U.S. are required to provide investors and regulators with detailed data about their financial performance and the risks they face. Soon, they may also have to disclose information about how they are dealing with climate change.
The U.S. Securities and Exchange Commission on Monday formally proposed new rules that would for the first time require businesses to report their greenhouse gas emissions, along with details of how climate change is affecting their businesses.
Companies would need to disclose potential risks to their operations from climate-related events such as having operations in an area facing the risk of rising sea levels.
The rules would also require companies to provide data on their own greenhouse gas emissions and also on how much energy they consume. These are known as “Scope 1” and “Scope 2” emissions, respectively.
“Scope 3” emissions have proved to be more controversial. They are emissions generated by a company’s suppliers and customers. Many companies and trade groups, including the U.S. Chamber of Commerce, have opposed mandated reporting of Scope 3 emissions saying it would be too burdensome and complicated to estimate emissions across a company’s operations.
