Monday, April 22, 2024
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SEC Drops Scope 3 Greenhouse Gas Reporting

The Securities and Exchange Commission released a limited greenhouse gas disclosure rule that omits the requirement for large publicly traded companies to release greenhouse gas emissions data from private companies in their supply chain.

This type of data, known as Scope 3 reporting, could have increased burdens on family farmers and ranchers whose beef is processed or sold by publicly traded companies, according to the National Cattlemen’s Beef Association.

NCBA President Mark Eisele says, “The final SEC rule that omits supply chain emissions reporting entirely is a testament to NCBA’s engagement with federal agencies and Congress to defend America’s cattle producers.”

In 2022, the SEC proposed a rule to require publicly traded companies to release data on their direct (Scope 1), energy and electricity (Scope 2), and supply chain (Scope 3) greenhouse gas emissions. The Scope 3 requirement was concerning to the cattle industry, because numerous farmers and ranchers have their beef processed by publicly traded companies or sold by publicly traded restaurants and retailers.

“Cattle producers have a track record of sustainability and conservation, and EPA data confirms that beef cattle are responsible for just 2% of total U.S. greenhouse gas emissions,” said NCBA Chief Counsel Mary-Thomas Hart. “With industry-wide emissions data already available from the EPA and the USDA Life Cycle Assessments, forcing individual farms and ranches to calculate and report emissions creates a costly and unnecessary burden.”

In addition to submitting technical comments to the SEC, individual NCBA members also submitted 7,406 emails to the SEC Commissioners and members of Congress detailing their concerns with the rule. NCBA also backed legislation like the Protect Farmers from the SEC Act, introduced by Rep. Frank Lucas (R-OK), Sen. John Boozman (R-AR), and Sen. Mike Braun (R-IN), to exclude agriculture from the Scope 3 requirement.

“NCBA’s grassroots members made a huge difference in this fight and thanks to your engagement, the entire industry is protected from what could have been an incredibly burdensome regulation,” said Idaho rancher and NCBA Policy Division Chair Kim Brackett. “To the producers who spoke up and submitted the over 7,000 comments to the SEC, thank you. Today is the perfect example of why the whole cattle industry benefits from having NCBA working on our behalf in Washington.”

The National Grain and Feed Association (NGFA) issued the following statement:

“Calculating Scope 3 emissions is widely recognized as being inherently much more difficult than determining direct and indirect emissions (Scopes 1 and 2) and calculating such emissions requires significant personnel, resources, expertise, and data management. NGFA thanks the SEC for recognizing that the proposed Scope 3 rule would have transferred the reporting burden and associated costs to participants in the agricultural value chain who in many cases do not have the resources or expertise to provide such information. The final rule avoids disproportionately affecting smaller value chain participants. Many NGFA member companies have led the industry in commitments to reduce greenhouse gas emissions. The Association is committed to fostering an environment in which resources to achieve these market-driven goals can be shared among large, small- and mid-sized value chain participants.”

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