Why the SEC Will Look For Carbon Footprints

Corporate GHG Emissions

As the chief regulator of the securities industry, the SEC is working on a climate change draft. The basic premise is that investors need to know standardized and accurate facts about a company’s exposure to climate change. But it’s not so easy to know what listed companies need to disclose and where they can be accurate.

  • The largest one, Scope 3, reaches far beyond the firm to its customers and suppliers.
  • Meanwhile, Scope 2 sticks with the company but includes the GHG it creates through, for example, the electricity it uses.

Our Bottom Line: The SEC

Responding to conflicts of interest, inaccuracies, and fraud, the U.S. Congress created a securities industry watchdog in 1934. Since then, the SEC (Securities and Exchange Commission) has guaranteed that financial disclosure documents would say what investors needed to know and could depend on.

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