SEC's new rule - A relief for farmers and ranchers

USAgNet - 03/08/2024

The Securities and Exchange Commission (SEC) has recently finalized a climate disclosure rule that brings good news to the agriculture community in the United States. Unlike its initial proposal, the final rule omits Scope 3 emissions reporting requirements, a move widely appreciated by the agricultural sector.

Scope 3 emissions pertain to the indirect greenhouse gas emissions from a company's supply chain, which, if required, would have placed a significant tracking and reporting burden on farmers and ranchers for every sale of produce.

The exemption from Scope 3 reporting is a significant relief, particularly because it was anticipated to require detailed tracking of greenhouse gas emissions across seven different categories for agricultural products. The agriculture community, supported by the American Farm Bureau, played a pivotal role in advocating for this change.

Their efforts included sending tens of thousands of messages to the SEC and Capitol Hill, explaining the potential adverse impacts of the proposed Scope 3 reporting on the farming and ranching community.

While the SEC's decision to exclude Scope 3 emissions from its final rule is a victory for farmers and ranchers across the nation, it's worth noting that California has passed its rule requiring Scope 3 disclosure for businesses operating within the state. This has prompted legal action, reflecting ongoing debates and concerns regarding emissions reporting requirements and their impact on the agriculture sector.

This outcome underscores the power of collective advocacy and represents a significant regulatory win for the agricultural sector, ensuring that farmers and ranchers are not unduly burdened with complex emissions reporting that could hinder their operations.

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