SEC's ESG Proposal Unlikely to Require Vendor Data

Alfredo Silva spoke to Ignites about a proposed Securities and Exchange Commission climate rule that will likely require public companies to disclose information about the emissions of their operations and product, but not of their vendors, suppliers, and contractors, known as Scope 3 emissions.

The rule could potentially include a provision requiring Scope 3 data, but include looser requirements for small companies, Alfredo said, adding that the commission could wait another year or two to require Scope 3 emissions disclosure.

Alfredo added that the rule will likely require that public companies disclose risks and opportunities presented by climate change, and may also require the disclosure of climate risks that are material to investors, like whether a new facility will be underwater in a decade due to climate change or if an agricultural product will be obsolete due to changing weather patterns.

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