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SEC climate disclosure rule takes positive step, but ultimately comes up short

March 6, 2024 Work Area: Land Systems

WASHINGTON – Today, the U.S. Securities and Exchange Commission (SEC) voted to approve a final rule on climate risk disclosure requirements for publicly traded companies. This decision was an opportunity for the SEC to ensure investors have access to consistent, comparable, and transparent climate risk information. While the rule requires companies to provide some new climate information around their emissions, unfortunately, the Commission approved a rule that comes up short. 

“The limited disclosure requirements in the SEC rule are a positive step, but not enough,” said Kathy Fallon, Director of Land & Climate at Clean Air Task Force (CATF). “Unlike the SEC’s original proposal, the final rule completely excludes scope 3 emissions, which are often the largest share of emissions. It also only mandates disclosure of scope 1 and 2 emissions for certain companies and when they are deemed material to investors. By watering down their reporting requirements, the SEC has missed a critical opportunity to shore-up the integrity of corporate climate claims – that’s bad for companies, investors, and the climate.” 

“It’s like buying a house and only receiving the disclosures that the seller thinks are relevant to you, if you receive any at all,” said Fallon. “And while the rule requires some reporting of carbon offsets, the scant details limit transparency into when and how companies use carbon offsets and the quality of those offsets, which is particularly important when companies use offsets to meet their stated climate targets.” 

CATF’s comments on the proposed rule highlight how unreliable and poor-quality carbon offsets are a widespread problem that enable corporations to exaggerate their climate commitments to the detriment of real climate outcomes. In the absence of public reporting requirements, there’s little incentive for companies to provide transparent and detailed information relating to the quality of their carbon offsets. Without action from the SEC, the comments argue, investors and consumers will continue to have a limited ability to verify, evaluate, or compare corporations’ climate claims. 

“Too often, companies have free rein to talk up their climate actions without providing the math on greenhouse gas emissions and offsets,” added Fallon. “Now, at least when the rule requires disclosure, companies will have to show their work.” 

Contact presse

Natalie Volk, Communications Manager, [email protected], +1 703-785-9580

À propos de Clean Air Task Force 

Clean Air Task Force (CATF) is a global nonprofit organization working to safeguard against the worst impacts of climate change by catalyzing the rapid development and deployment of low-carbon energy and other climate-protecting technologies. With more than 25 years of internationally recognized expertise on climate policy and a fierce commitment to exploring all potential solutions, CATF is a pragmatic, non-ideological advocacy group with the bold ideas needed to address climate change. CATF has offices in Boston, Washington D.C., and Brussels, with staff working virtually around the world. Visit and follow @cleanaircatf. 

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