Energy & Environment — Green groups say SEC rule needs teeth

While the proposal would require a company to disclose all of its direct emissions, it only required them to disclose indirect emissions — those from its supply chains and the use of its products — when they are “material” to investors. 

What’s the concern? Progressives expressed concerns that the rules could leave it up to companies to decide whether to reveal these emissions, which, depending on the industry, can make up a major proportion, or even a vast majority, of their climate contributions. 

Lena Moffitt, chief of staff at environmental group Evergreen Action, said that without clearer requirements on who needs to disclose this type of emissions, “you run the risk of that essentially being a backdoor way to make this rule voluntary.” 

“We know that voluntary initiatives don’t work. This needs to be clear, consistent and mandatory,” Moffitt said.  

If finalized, the SEC’s proposal would establish requirements for publicly traded companies to tell their investors how climate change impacts their financial stability, and how much they emit.  

It would mandate that firms disclose emissions from both their direct operations, called Scope 1, and emissions from energy they purchase, which would be Scope 2.   

In certain cases, it would also make them disclose emissions that they indirectly cause, such as those stemming from the products they sell, known as Scope 3 emissions.   

The rule explicitly requires companies that have pledged to reduce their Scope 3 emissions to disclose them to investors.   

It also requires Scope 3 emissions to be disclosed when they are “material,” referring to information that would influence investors’ decisions to buy or sell — which has become a flashpoint in the past year’s debate over what form of climate disclosure the government should require. 

The conservative position on the SEC’s new climate rule — held by SEC Commissioner Hester Peirce (R), who voted against the new rule, as well as by former Commissioner Elad Roisman (R) — is that any climate disclosures that are material are already legally required and no further mandate is necessary.   

On Monday, the SEC rejected this view, as well as calls to limit disclosure requirements to just Scope 1 and Scope 2. It’s a significant step, because for some industries, such as producers of fossil fuels and automobiles, the emissions that come from their products — Scope 3 —are the greatest source of their contributions to climate change. 

And climate and financial transparency advocates say that for such industries, these emissions can be the most important to disclose to get a complete picture, giving the example of makers of gas-powered and electric vehicles, whose operations may look similar, but whose products have vastly differing climate impacts.   

“If you take two auto companies — Tesla and General Motors — and you look at the Scope 1 and 2 emissions from building automobiles, you’re going to find relatively comparable results,” Ivan Frishberg, the chief sustainability officer at Amalgamated Bank, said during a briefing for reporters last week.   

“It’s really when you come to Scope 3 that you understand what the associated emissions are,” he added.  

Read more here. 

That effort will be led by the World Meteorological Organization (WMO), a U.N. agency, Guterres said in a press release. It will focus on making alert systems available in the developing world, as they are already widely used by many wealthy countries.  

So what’s that mean? Early warning systems provide people with more time to brace for potentially deadly disasters like heat waves, flooding and droughts and offer information on how governments, communities and individuals can minimize their impact. Those warnings are “critical” in helping reduce disaster risks and support climate adaptation, Guterres said. 

“However, one-third of the world’s people, mainly in least developed countries and small island developing states, are still not covered by early warning systems,” Guterres said, noting that 60 percent of people lack coverage in Africa.  

“This is unacceptable, particularly with climate impacts sure to get even worse,” Guterres said in a statement, adding that “early warnings and action save lives.”  

Read more from The Hill’s Monique Beals. 

The U.S. Fish and Wildlife Service on Wednesday issued a proposed rule that would upgrade the northern long-eared bat’s status from “threatened” to “endangered” after a coalition of wildlife groups successfully sued for the change. 

The bat, which has a range across most of the eastern U.S. and parts of southern Canada, has been devastated by white-nose syndrome, a fungal disease first observed in New York populations in 2006. Sixteen years later, the disease has caused a 99 percent population decline.  

In 2015, the service listed the bat as “threatened” rather than endangered, prompting a lawsuit from a coalition of conservation groups including the Center for Biological Diversity, Defenders of Wildlife, Sierra Club, Coal River Mountain Watch and Ohio Valley Environmental Coalition.  

The service had argued the bat did not rise to the level of endangered status because of the role of the disease, rather than human activity, in population loss.  

In January 2020, Judge Emmet Sullivan of the District Court for the District of Columbia, an appointee of former President Clinton, ruled in favor of the plaintiffs, saying the service’s decision did not properly account for human activity or explain why such drastic population loss did not merit protections. 

At the beginning of March, Sullivan ordered the Fish and Wildlife Service to make a decision on the bat’s status by December, rather than the three to four years the service had asked for.  

“This proposed endangered listing recognizes that human activities, combined with the plague of white-nose syndrome, are pushing the species to the brink,” Jane Davenport, a senior attorney with Defenders of Wildlife, said in a statement. “While scientists race the clock to save bats from white-nose syndrome, the Service must act immediately to protect the surviving population from human-caused threats before time runs out.” 

Read more about the proposed rule here.