Why Supply Chain Emission Disclosure Is Necessary for Investors

sec disclosures featured image

Climate Advisers latest policy brief looks at the new U.S. Securities and Exchange Commission’s proposed climate emissions disclosure rules and how some corporations may not be required to disclose up to 90-83 percent of their estimated total emissions.

The potential gap in disclosure is particularly acute for companies that rely on the  global forest, food, and land sectors. As global food systems are responsible for over one-third of the world’s emissions and 40 percent of US GDP is exposed to climate-related financial risks in sectors exposed to tropical deforestation. Without clarity on the level of emissions associated with companies’ supply chains, it will be hard for investors to assess potential risks from policy changes, supply chain disruptions and consumer behavior responses to climate change.

This brief shows why supply chain emissions (classified as scope 3 in greenhouse gas accounting practices) are material for investors and shares a solution to ensure the investment community has the information it needs.