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Ag Escapes SEC Emission Reporting Rule

photo credit: AFBF Photo, Mike Tomko

The U.S. Securities Exchange Commission on Wednesday voted to finalize a climate-disclosure rule that dropped a requirement for U.S.-listed companies to disclose Scope 3 greenhouse gas emissions, including farms and ranches.

The final rule is considered a victory for farmers and ranchers who spoke out against the "Enhancement and Standardization of Climate Related Disclosures for Investors" rule.

The final rule relieves a significant burden on food companies that rely on agricultural commodities across their supply chains. That rule was touted by the SEC as a way to protect investors in publicly traded companies by requiring those companies to report data about their entire supply chains.

When the rule was proposed in April 2022, a group of more than 100 agriculture interest groups expressed concern that the rule could have required farms and ranches to report personal and business-related information to the SEC.

Groups like the American Farm Bureau Federation said the rule was potentially dangerous to ag because nearly all ag products eventually touch publicly traded companies.

AFBF President Zippy Duvall on Wednesday said it was good to see the SEC withdraw an "overreaching" Scope 3 requirement.

"Farmers are committed to protecting the natural resources they've been entrusted with, and they continue to advance climate-smart agriculture, but they cannot afford to hire compliance officers just to handle SEC reporting requirements," he said in a statement.

"This is especially true for small farms that would have likely been squeezed out of the supply chain."

The state of California also passed a law requiring companies conducting business in the state to report Scope 3 emissions.

"Now that the SEC has thoughtfully evaluated the issue, AFBF urges California to follow the SEC's lead by withdrawing its Scope 3 reporting requirement for any company doing business in the state," AFBF said in a news release.

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