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SEC’s climate rule heats up debate on supply chain emissions

That debate has trickled over to Congress. Eight Democratic senators, led by Brian Schatz of Hawaii, Sheldon Whitehouse of Rhode Island and Elizabeth Warren of Massachusetts, called on the SEC to include a quantitative threshold for Scope 3 reporting to prevent underreporting in sectors that have most of their emissions coming from supply chains.

But 32 Republican senators, including John Hoeven of North Dakota, Tim Scott of South Carolina and Michael D. Crapo of Idaho, told the SEC that such requirements would be overly burdensome for farmers and agricultural producers.

At press time, public comments from some companies that would be affected by the proposal were available. Salesforce, Dell Technologies and Etsy were among the top firms that filed letters with the SEC, largely in support of the proposal. But dozens of major corporations met with SEC Chairman Gary Gensler and Commissioners Caroline Crenshaw, Hester Peirce and Allison Herren Lee, as well as agency staff, in the weeks after the agency announced its proposed rule in March.

According to memos published by the SEC, the agency held more than 50 meetings after it released the proposed rule. The SEC met with General Motors CEO Mary Barra twice to discuss the climate risk disclosure proposal, including Scope 3 emissions and the safe harbor provision.

SEC staff also focused on companies’ concern with Scope 3 emissions with chief accounting officers and controllers from dozens of corporations, including Google parent Alphabet, Bank of America, Mars, Verizon Communications and Wells Fargo in a May 17 meeting. The agency held talks with representatives from Dow, Amazon.com, The Goldman Sachs Group and JPMorgan Chase & Co. throughout the comment period.

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