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October 12, 2023

Reps. Schiff, Vargas, Colleagues Urge SEC to Include Stricter Greenhouse Gas Emissions Disclosures for the Biggest Corporations

Washington, D.C.— Today, Representatives Adam Schiff (D-Calif.) and Juan Vargas (D-Calif.) led a letter to the U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler, urging the Commission to require the largest corporations to fully disclose their greenhouse gas emissions. Schiff and Vargas were joined by 24 members of the California delegation.

California recently passed legislation that takes on the fossil fuel industry by requiring giant corporations in California to accurately report their total greenhouse gas emissions. The letter urges the SEC to adopt California’s new legislation as the national standard, specifically advocating that public companies disclose all emissions throughout their supply chain. This measure would ensure that these massive corporations cannot keep investors and the public in the dark about their environmental impact.

“Comprehensive and reliable information disclosing public companies’ exposure to climate risk is critical to fulfilling the SEC’s stated mission to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation,” the letter said.

“Scope 3 emissions data, which covers all indirect emissions that occur in upstream and downstream activities in an issuer’s supply chain, is a key component to providing investors access to public companies’ climate-related financial opportunities and risks,” the letter continued.

This letter is signed by Representatives Nanette Barragán (D-Calif.), Julia Brownley (D-Calif.), Salud Carbajal (D-Calif.), Tony Cárdenas (D-Calif.), Judy Chu (D-Calif.), Mark DeSaulnier (D-Calif.), Anna Eshoo (D-Calif.), Robert Garcia (D-Calif.), Jimmy Gomez (D-Calif.), Jared Huffman (D-Calif.), Sara Jacobs (D-Calif.), Sydney Kamlager-Dove (D-Calif.), Ro Khanna (D-Calif.), Barbara Lee (D-Calif.), Mike Levin (D-Calif.), Ted Lieu (D-Calif.), Zoe Lofgren (D-Calif.), Doris Matsui (D-Calif.), Kevin Mullin (D-Calif.), Jimmy Panetta (D-Calif.), Katie Porter (D-Calif.), Linda Sanchez (D-Calif.), Mark Takano (D-Calif.), and Mike Thompson (D-Calif.).

The letter to Chair Gensler can be found HERE or below:

Dear Chair Gensler:

We are writing today to strongly urge the U.S. Securities and Exchange Commission (SEC) to include robust greenhouse gas (GHG) emissions disclosure requirements in its final climate disclosure rulemaking, particularly in light of California’s anticipated Scope 3 disclosure requirements.

Comprehensive and reliable information disclosing public companies’ exposure to climate risk is critical to fulfilling the SEC’s stated mission to “protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.”

On October 7, Governor Newsom signed into law the Climate Corporate Data Accountability Act (SB 253), which would require companies with more than $1 billion in annual revenues to file annual reports publicly disclosing their Scope 1, 2, and 3 GHG emissions.

While we support the SEC’s expressed intention to strengthen GHG emissions data requirements for public companies through the agency’s anticipated disclosure rule, we strongly urge the Commission to follow California’s lead and specifically include Scope 3 disclosure requirements in addition to Scope 1 and 2. 

Scope 3 emissions data, which covers all indirect emissions that occur in upstream and downstream activities in an issuer’s supply chain, is a key component to providing investors access to public companies’ climate-related financial opportunities and risks. Without consistent and reliable Scope 3data, investors will be limited in evaluating the management’s performance with respect to those risks and opportunities.

The passage of SB 253 virtually eliminates the cost of compliance with a federal Scope 3 disclosure requirement for all businesses operating in California with over $1 billion in revenue, opening the door for the SEC to ensure that investors receive fulsome, reliable disclosure from public companies on their emissions up and down the supply chain. Investors need access to this relevant information and data to make the investment decisions that drive our economy. In order to allow investors to assess the management performance of public companies with respect to financially material climate issues, public companies must be required to disclose their Scope 3 emissions and demonstrate how they are managing them.

Thank you for your consideration of this important issue, and we look forward to reviewing the Commission’s finalized disclosure rules.

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