SEC Chief Expects ‘Fair Number’ of Large Companies to Disclose Scope 3 Data in Climate Rule

A “fair number” of the largest U.S-listed companies should be caught by a proposed requirement to disclose third-parties’ greenhouse gas emissions, the chair of the U.S. securities regulator told Reuters Events Responsible Business forum in an interview.

The Securities and Exchange Commission (SEC) last month unveiled a landmark rule that would require some companies to disclose so-called “Scope 3” emissions, emissions generated by the company’s upstream and downstream activities.

The March draft rule, which is subject to public consultation, would require large so-called “accelerated filers” to disclose Scope 3 emissions if they are material, or included in any emissions targets the company has set.

The SEC has not said, however, how many companies it would expect to be captured by the requirement, which could be a game-changer for some carbon-heavy industries, like oil and gas.

SEC chair Gary Gensler said the rule aims to capture a significant number of the roughly 1600 U.S.-listed firms that are deemed “accelerated filers.”

“Amongst accelerated filers, a fair number of companies have made commitments and targets to their future—including Scope 3. If a company has said to the public and shareholders that they have a goal to mitigate climate risk … one would say that’s an important requirement to disclose Scope 3 emissions.”

Gensler’s remarks may provide greater clarity for companies unclear on whether they would be expected to report Scope 3 emissions under the draft rule.

Progressives and activist investors have pushed for the SEC to require Scope 3 emissions disclosure to hold companies accountable for all the carbon dioxide and methane they help generate. Meanwhile, corporations have been pushing for a narrower rule that will not boost compliance costs.