Half way through October and still there is not a smidge of concrete intel from the Securities and Exchange Commission (SEC) as to when the public could see a final version of its proposed climate disclosure rule. For more than 18 months, investors and publicly traded companies have patiently waited to assess the future of their investments and their companies. But now that the long-anticipated deadline is practically here, the SEC is scrambling to find any excuse to justify the continual delay.
Last month, SEC Chair Gary Gensler was called to the stand in a plethora of House Financial Services Committee hearings. Through his maze of recent, inconsistent testimony, the hope for a final rule by the end of October has become rather grim. SEC Chair Gensler now says the “hold up” stands within the decision to include publicly opposed Scope 3 emissions.
Scope 3 encompasses emissions that are not a direct result of a companies’ immediate activities. Scope 3 instead requires companies to track their emissions down the value chain – a series of consecutive steps that go into the creation of a finished product – and make assumptions that reflect the intensity of emissions that occur as a result. These emissions are inherently subjective and have faced ongoing scrutiny for their inclusion in the proposed rule.
Unfortunately, there seems to be no end in sight as the Commission continues to linger on its final rulemaking release. The SEC is making affected parties wait even longer than anticipated as they decide whether to include Scope 3 emissions, and to what extent. Investors and companies deserve long-awaited answers and yet another delay by the Commission will continue to leave companies stranded in the dark.