Feb. 3, 2022
I am reaching out to share a video of a recent Stanford University Sustainable Finance Initiative (SFI) Seminar entitled: The Road to Climate Stability Runs Through Emissions Liability Management. The talk can be found here: https://youtu.be/GBQYdtapdnM. The video presents the analysis we developed in our working paper of the same title, and which is attached to the text of this comment. In the context of SEC File No: S7-02-22, this SFI research has several key takeaways. While the GHGRP Scopes as currently constructed are useful for internal decision-making, they are not fit-to-purpose for investors and regulators. As practice moves from voluntary to compliance structures, it will be necessary to evolve into a system of tracking emissions as liabilities. Called E-liability accounting, this practice closely resembles the work of collecting upstream Scope 1, 2 and 3 emissions data yet it is purpose-built to deliver the kind of financial accounting information investors need to evaluate climate risk and allocate capital toward lower-carbon alternatives. The SEC can lay the groundwork to move to an E-liability accounting system by requiring disclosure of Scopes 1 and 2. The evolution from GHGRP to E-liabilities is gaining traction in Europe. We invite you to consider the research and writings of other leading academics and standards setters who share this view. We can provide introductions upon request. https://www.sec.gov/comments/s7-10-22/s71022-20156544-324682.pdf