SEC drops Scope 3 from final climate rule
What are Scope 3 Emissions? :
In its climate disclosure rule, the SEC left out the requirement for certain-sized companies to report Scope 3 emissions. Scope 3 emissions are emissions that occur not only as a result of a company’s business practices, but throughout any supply chain that a given business relies on. The SEC decided to leave out Scope 3 reporting from its requirements due to push back regarding the cost, consistency, and accuracy of Scope 3 data.
Why It Matters and Calico’s Take:
In order for companies to report emissions data to the level that Scope 3 requires, access to verified and reliable data is imperative. This data includes building data throughout the supply chains of all industries. The state of California has passed SB 253 a bill that will require Scope 1, 2, and 3 emissions reporting from some 5,300 companies doing business in the state starting in 2027. The implication of Scope 3 being included in SB253 has impacts well outside of the California state line. In Calico’s world, this shows up as buildings outside of California. Access to accurate building level data is a dependency for emissions tracking.
Ultimately, outside of any state requirements like California’s, it will be up to the SEC to hold businesses accountable for their emissions. And for businesses to do this successfully, companies will need access to better data directly from utilities. Starting now to educate and create best practices is an imperative.
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