April 24, 2022
Dear Secretary Vanessa Countryman,
Re: Proposed Rule Regarding The Enhancement and Standardization of Climate-Related
Disclosures for Investors (File Number S7-10-22)
I recommend that the proposed rule does not move forward at this time without a significant extension for two reasons:
1. The proposed rule (of now 490 pages) requires numerous actions by the registrants that need to be accurately assessed by the impacted parties and cannot be done in the comment period currently existing for this rule. The SEC has put in considerable time and resources into developing this proposal and should allow a commensurate time period for responses due to the highly technical nature and resource requirements associated with potential compliance to the rule. Comment period extensions are routine as exemplified by those granted to the: EPA N5PS guidelines, HHS extension NPRM and the BLM Coal Program review as examples of only a few of the diverse agencies that received extensions in late 2021.
The rule itself has been modified with text altered from the original publication of 510 pages to the now 490. It contains over five hundred questions in the request for comment sections which indicates a lack of decisiveness in the rule and/or direction. Given this situation alone an extension of 60 days is requested at a minimum. Of utmost concern is the expectations around scope 3 emissions.
2. The scope 3 emissions are referenced 345 times in the latest version of the rule and the even the SEC can not provide guidance on what is or is not a scope 3 emission. This rule references the Greenhouse Gas protocol developed over 15 years ago as a source of definitions for scope 3 but the GHGP is itself still updating and defining these types of emissions which are so impactful in what their reporting requirements would be. Scope 1 (direct)emissions are clear in being the direct GHG emissions with scope 2 (indirect) being electricity purchased or consumed but seems light on cogeneration operations understanding and scope 3 (all other indirect) is undefined with generalities employed as examples. This hard to define and even harder to quantify emission category should be removed and or clearly and explicitly defined as well as how to calculate across international boundaries and understandings. The GHGP does not provide this. This area by itself requires either an extension for comments and answers or a substantial revision in the rule.
Based on the existing rule with no revisions or accommodations- if passed the rule would lead to a continuous litigious situation wasting countless manhours instead of addressing the very real nature of global warming and a real solution being developed. One other comment the GHGP already provide an internationally accepted method for climate impact accounting and is there really a need to produce another method?