May. 17, 2022
The SEC's climate disclosure proposal is mission critical to the United States ability to lead the world in sustainable innovations. The future of our planet depends on our ability to engineer sustianble solutions for mass manufacturing. Without clear guidelines in place, large corporations will be able to continue to greenwash their businesses to appear sustainable. These proposed rule amendments will hold the most valuable companies with the largest carbon footprints accountable. Once implemented, these rules will help publicly reporting American companies understand the impact they're having on the planet. This means that any company who seeks to supply a publicly reporting entity will have to provide adequate carbon footprint data in order to be able to supply commercial contracts. My recommendation for the SEC would be to create clarity around 5 specific topics: --Standardize the way scope 3 emissions are quantified. Specifically, what would the methodology be for quantifying the carbon footprint of 1 pound of raw material? --How can carbon footprint data become standardized in the procurement and product development process? Could carbon footprint be standardized on technical datasheets for raw materials and component parts? --Can there be an incentive structure put in place to reward carbon footprint reduction (or neutrality)? As we all know, what we incentivize grows. --Is there a form or application process that a non-public company could go through to streamline their ability to sell products and services to publically traded companies? --How specific is a supplier supposed to get when it comes to the formulation of raw materials. For example, a 20% hemp fiber-filled plastic is more than just hemp and plastic. There could be a dozen or more additives in that specific compound. Will raw material suppliers be forced to disclose their exact formulation (as a means to quantify carbon footprint)? How can IP be protected while creating transparency on the carbon footprint information of all the materials in a formula? Better understanding how these 5 topics will play out will help create comfort and clarity for both reporting companies and the suppliers that support them. Climate disclosures are going to drive sustainable innovation in every market sector. This means that sustainable materials, technologies, products, and services will be positioned to thrive in a world where climate disclosures are standardized. Thank you, SEC, for helping to usher in the sustainable future that our planet needs and deserves. -Jesse Henry Jesse Henry CEO & Founder Heartland