New SEC Climate Disclosure Regulations Will Set the Bar for Climate Reporting

In light of the Securities and Exchange Commission’s (SEC) proposed climate disclosure rules, many members of the trucking industry are concerned about potential effects to business, according to a recent article from FreightWaves.

In March, 2022, the Securities and Exchange Commission released a set of proposed climate disclosure rules that would require publicly traded companies to report information about climate-related risks, including a disclosure of the registrant’s scope 1, 2 and 3 greenhouse gas emissions.

The article, quoting Oliver Browne, vice president of policy at the mobile fuel delivery company Booster, explains that the SEC is on track to pass these disclosures, as there is a broad push by investors to have access to this information in a “comparable, standardized way from companies.” The regulatory move is not unusual, as the EU, U.K., Japan, New Zealand and Singapore each already have or soon will have similar climate disclosure rules.

Though the information gained by such a measure would be beneficial to the climate movement, Freightwaves explains apprehensions are arising in the freight industry due to the inclusion of scope 3 emissions, which cover emissions related to supply chains. This will have a larger impact on smaller freight companies which, although exempt from reporting their own scope 3 emissions, will be under pressure from large retailers who will want that supply chain emissions data, explained Browne. This burden on smaller carriers is likely to be widespread, as about 90 percent of carriers in the U.S. operate truck fleets of 10 or fewer.

Despite concerns about the complexities of climate reporting for smaller carriers who might lack the administrative resources to gather and organize such information, many are optimistic about the SEC’s decision and the information it could open to investors interested in the sustainability of companies’ operations. Frank Mycroft, CEO of Booster, told Freightwaves that if the rules work as designed, they will set a bar for emissions and climate reporting that will lead to transparent conversations around the risks and impacts of the industry.