SEC Drops Scope 3 Emissions Requirement from Climate Disclosure Rules

The U.S. Securities and Exchange Commission's decision to remove Scope 3 emissions reporting aims to enhance the rule's legal resilience.

The SEC is set to adopt Climate Related Disclosure Standards, likely in March, excluding mandatory Scope 3 greenhouse gas emissions reporting.
Scope 3 emissions, related to a company's supply chain, have been a contentious point due to their complexity and legal challenges.
The move aligns with concerns over legal and political challenges, including doubts about the SEC's authority to mandate such disclosures.
Experts suggest that making Scope 3 reporting optional could balance investor interests with the practicalities of data collection.
The decision diverges from EU regulations, raising questions about global sustainability reporting standards.