Jun. 16, 2021
Complete emissions disclosure: Disclosure rules should include Scope 1, 2 and 3 greenhouse gas emissions according to the GHG Protocol. All three scopes must be included in order to assess the full range of climate change risks facing companies. The SEC should mandate that a standard GHG measurement system be used, with industry-specific methodology, and should require listed companies to phase in use of this system over a maximum of 3 years. For the food and agriculture industries, the SEC may wish to consult the Ceres, CCAFS, CGIAR report, Measure the Chain: Tools for Assessing GHG Emissions in Agricultural Supply Chains to evaluate the most commonly used methodologies. Industry-specific metrics: SEC rulemaking should include industry-specific metrics, as material climate risks manifest in different ways by industry. These metrics should build on existing standards in common use by investors and companies. Identifying such industry-specific metrics would also allow for comparable disclosures. Scope 3 emissions disclosures are particularly important in the food and beverage industry. An estimated 75-90% of a typical food product’s carbon footprint occurs in the supply chain upstream of the point of sale (Scope 3). Disclosure requirements that do not include Scope 3 emissions, therefore, do not reflect the true magnitude of this industry’s climate exposures. ----- Huw Thomas Co-Founder/President/COO, Counterfactual Ventures