Subject: SEC Comment: File Number S7-10-22
From: Mikah Anderson
Affiliation:

Apr. 27, 2022

 


SEC Carbon Disclosure Comment 
I am writing in support of The Enhancement and Standardization of Climate-Related Disclosures for Investors. 
My name is Mikah Anderson, a current student at the Leeds School of Business studying Sustainability and Social Responsibility, and a current Intern at Seagate Technology working on sustainability communications. I have a vested interest in The Enhancement and Standardization of Climate-Related Disclosure for Investors because it directly applies to my day-to-day interactions with stakeholders. Mandating certain disclosures would force the ceasing of repetitive asking for information from stakeholders requiring facts and figures for personal analysis. 
Upon further inspection of The Enhancement and Standardization of Climate-Related Disclosures for Investors section C-2, Disclosure of Carbon Offsets or Renewable Energy Credits If Used, there is an apparent lack of additionality requirements for carbon offsets. 
Michael Gillenwater, the author of What is Additionality? Part 1: A long standing problem from the GHG institute defines additionality as “a determination of whether a proposed activity will produce some ‘extra good’ in the future relative to a reference scenario,” (Gillenwater 3). 
For an offset to be effective, it must have impacts that are additional. For example, if an offset was protecting forest that would never be cut down, the impact would be negligible. However, if an offset aided in protecting forest lands that were to be deforested, then an impact would be present. It would be financially wasteful for a company to purchase an offset and later realize that it did not create an impact. Beyond that, it is unethical for a company to claim they are carbon neutral, when said company did not meaningfully contribute to the carbon reduction efforts. 
As stated in The Enhancement and Standardization of Climate-Related Disclosures for Investors, “Some registrants might plan to use carbon offsets or RECs as their primary means of meeting their GHG reduction goals,” (page 78). This statement further drives the importance of defining additionality as it notes that some companies will be reliant on offsets to meet their GHG goals. 
Additionality regarding offsets is present in understanding the actual impact of the purchase of offsets. The SEC should include further guidance for companies regarding what constitutes quality of an offset and where the threshold is for acceptability.