Apr. 03, 2022
Dear Chair Gary Gensler, I strongly support the Proposed Rule S7-10-22: Enhancement and Standardization of Climate-Related Disclosures for Investors. I applaud the tremendous efforts that have contributed to this ruling. It is clear that the proposed rules reflect the increasing urgency of holding companies accountable for the harmful environmental impacts they cause. As a product manager implementing carbon accounting software, I wish to share comments regarding the implications and feasibility of the proposed rulings. Note these views represent my personal views and not those of any organization. 1. I encourage the ruling to explicitly require the calculation of Scope 1,2, and 3 in compliance with the globally accepted standard for GHG accounting, the GHG Protocol. This promotes global compatibility of reporting and reduces overhead cost to firms. 2. I recommend taking the bold step of REQUIRING disclosure of Scope 3 Value Chain emissions. In many sectors, especially consumer-facing sectors such as consumer products, E-Commerce, etc., Scope 3 emissions typically account for 80-90 percent of companies total emissions. Disclosure of Scope 3 emissions is absolutely critical to providing transparency to a corporations full extent of environmental impact and risk. The current ruling which asserts a highly subjective assessment of materiality provides an unnecessary loop-hole. I recognise first hand the challenges of calculating highly accurate scope 3 emissions, although this should be no excuse for excluding such a metric from disclosure. Indeed, low-effort and low-cost methods exist to calculate scope 3 emissions (spend-based calculations) which, at a minimum, enable a first-pass screening of scope 3 emissions to prioritise data collection efforts. It is only by requiring ALL companies to report on scope 3 that this rulin g will accelerate the ability to calculate accurate scope 3 value chain emissions. 3. Registrants should be required to disclose Scope 1, 2, and 3 emissions with and without offsets. This provides transparency into the valid efforts firms make to offset emissions on their path to net zero. 4. I recommend the SEC creates a central repository/database for the required climate exposure reports and enables required metrics (i.e. Scope 1,2,3 emissions, GHG Intensity, etc.) to be accessible by API. Eliminating barriers of access to sustainability reporting is critical to enabling companies to benchmark against each other and enable capital markets to accelerate change via competition. This would be in alignment with the CSRD proposal from the EU, which requires companies to digitally tag reported information so it is machine readable (https://ec.europa.eu/info/business-economy-euro/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en ) This ruling will be looked upon for decades as a landmark regulation, and I encourage you to make the listed modifications to significantly boost its impact. Please pass this ruling as soon as possible. Sincerely, Ms. Elizabeth Hadley Product Manager, Planetly Carbon Management Software US Citizen, MIT Computer Science Graduate Resident of Munich, Germany