The Securities and Exchange Commission finalized new rules on Wednesday that determine how and when public companies must disclose how much greenhouse gas emissions they produce, as well as potential climate risks due to their business operations. The rule, however, is seen as a much weaker version than what was originally proposed two years ago.
Under the original proposal, large companies would have to share the emissions produced from their operations, as well as those produced throughout a product’s lifespan, including those from the parts and services bought from other supplies and how the product is eventually disposed of. That proposal was lambasted by Republicans, as well as a variety of companies and industries such as fossil fuel producers.
Under the new rules, companies must make investors aware of the risks the business faces from climate changes and report their greenhouse gas emissions—but only if they consider the emissions of significant importance to their bottom lines. Additionally, thousands of smaller businesses are exempt from the rules, unlike in the original proposal, and there’s no requirement for companies to share the climate expertise of people on the board of directors.
“Thanks to corporate lobbying, disclosure of the very real financial risks from climate change has fallen victim to the culture wars,” said Allison Herren Lee, former SEC acting chair and commissioner.
