ARLINGTON, VIRGINIA, US — New climate reporting rules approved by the US Securities and Exchange Commission (SEC) do not require US-listed companies to disclose Scope 3 greenhouse gas emissions, a development praised by the National Grain and Feed Association (NGFA), which was among the grain industry groups concerned about the difficulty and costs of compliance.

“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,” the NGFA said. “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 SEC announced in March 2022 a proposed rule requiring publicly traded companies to provide certain climate-related information in their registration statements and annual reports, including “emissions from upstream and downstream activities in the value chain,” referred to as Scope 3 emissions. In comments submitted in June 2022 to the SEC, the NGFA, American Feed Industry Association (AFIA), and North American Millers’ Association (NAMA) outlined several burdens the proposed requirements would have created in the agricultural value chain.

The final rule approved by the SEC limits the disclosure requirement to Scope 1 and Scope 2 emissions, or those that a company directly produces, and those associated with its energy consumption.

“The final rule avoids disproportionately affecting smaller value chain participants,” the NGFA said. “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.”