The SEC's New Climate Disclosure Proposal: What You Need to Know
"The proposal is much broader than most expected since the SEC is specifically requiring the disclosure of scope 3 emissions, which include indirect emissions that occur in a company’s value chain, that is those generated by suppliers and partners," says Jasmin Sethi, associate director of policy research at Morningstar. Such data would be valuable for investors to make informed decisions but will be "challenging for companies to gather and report" because they're loaded with a vast number of inputs for manufacturing, transportation, and so on.
The proposal is likely to be challenged by companies and states amid arguments about what information a "reasonable investor would consider material for investing or voting," says Sethi.
Leslie Norton