Mar 7, 2024

SEC scraps climate change provision

The Securities and Exchange Commission (SEC) has scrapped a plan opposed by farm groups that would have mandated tracking of greenhouse gas emissions in company supply chains, all the way down to family farms.

This action occurred as the SEC finalized a rule for large corporations to disclose their carbon footprint, according to the National Potato Council (NPC),

“We are extremely pleased to see that the SEC stayed within their scope of regulating the activities of publicly traded companies and did not extend their reach to the farm level,” Ben Sklarczyk, NPC vice president of environmental affairs and a potato grower from Michigan, said in a statement.

Approved by the SEC in a 3-2 vote, the rule limits the disclosure requirement to those that the company produces itself and those associated with its energy consumption (deemed Scope 1 and Scope 2 emissions).

Dropped was a requirement to disclose emissions (deemed Scope 3), which originate throughout supply chains such as in agriculture. As originally written, it would have mandated a food company to track all the emissions associated with producing the commodities used in its products all the way down to the family farm.

“The National Potato Council believes the proposed Securities and Exchange Commission’s Climate Rule is a significant government regulatory overreach,” according to a 2022 policy adopted by the board. “NPC should take all necessary actions to exclude agriculture from any final rule and thereby minimize the impact on family farms and related activities.”

Following that policy adoption, NPC and nine other organizations filed comments in 2022 opposing the proposed rule indicating that Scope 3 disclosure requirement would be “wildly burdensome and expensive” for farmers and potentially put small and mid-size farmers out of business and supported the Protect the Farmers from the SEC Act, introduced by Rep. Frank Lucas (R-Okla.) and Sen. John Boozman (R-Ark.).