Green Finance Briefing: The new SEC proposal and fossil fuel financing

SEC proposes new climate risk disclosure regulations

Climate-related risk disclosures are one step closer to becoming a reality in the US. Last week, the Securities and Exchange Commission issued a new proposal requiring companies to begin quantifying and reporting their greenhouse gas emissions. 

This represents an important milestone in the country’s path to a sustainable economy, bringing it closer to the climate conversation in Europe about what companies should know and disclose about their carbon footprints. 

However, the proposal does not enforce disclosures on indirect emissions, referred to as Scope 3 emissions – one of the most contentious factors that continues to get strong pushback. 

Under the new regulations, Scope 1 and Scope 2 emissions, which are direct emissions resulting from a company’s general operations and energy use, would have to be disclosed. 

But things get a bit more complicated with Scope 3 emissions – the indirect emissions generated by suppliers and customers – as they are hard to quantify and have sparked many debates over how to regulate them. 

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