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Category: Manufacturing

National Association of Manufacturers says Proposed SEC Rules on CO2 Reporting Will not Work



Trade Group offers a Number of Suggestions to make Controversial Rules Workable for Manufacturers

Nov. 29, 2023

Last year, the Securities and Exchange Commission (SEC) is proposed new rules that would require companies to disclose a massive amount of information relative to CO2 emissions, much of it “impractical to collect or immaterial to investors.”

Supply Chain Digest Says...


NAM says it has engaged in a number of lobbying efforts to stop the rules from being implemented, including making revising the climate rule a focal point of the NAM’s corporate finance agenda.

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That according to a November 3 blog post by the National Association of Manufacturers (NAM). The organization is strongly against the new rules, and offers a number of suggested changes to make it more workable for US manufacturers.

NAM says the new rule includes the following:

1. A requirement for qualitative descriptions of companies’ climate-related risks and any efforts to respond to those risks, including internal metrics and confidential strategies.

2. A mandates quantitative reporting of companies’ greenhouse gas emissions, while compelling companies to conduct quantitative climate impact analyses within their consolidated financial statements.

The result, NAM says: “An unworkable framework that imposes uniform mandates that do not align with manufacturers’ efforts to respond to climate change—but do impose an enormous burden on manufacturers across the country.”

In the blog, NAM identifies a series of what it says are necessary changes that the SEC must make to reduce compliance costs and limit liability risks associated with the rule’s requirements.

Specifically, the NAM is calling on the SEC to do the following:

Strike disclosure of Scope 3 emissions, which requires companies to track emissions data from suppliers and customers throughout the supply chain. While some manufacturers are already working to understand these emissions, the data collection, estimation and reporting methodologies are still evolving—and the proposed mandate could have a disproportionate impact on small businesses swept into the reporting regime.

Rescind accounting changes that would require climate impact analyses of companies’ consolidated financial statements on a line-by-line basis.

Delay annual GHG emissions reporting, granting manufacturers more time to collect and verify data.
Adjust the climate-related risk disclosures and Scope 1 and Scope 2 emissions reporting requirements to make the provisions less prescriptive and more aligned with existing company practices.

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Fine-tune the guidelines for reporting on climate-related goals to avoid penalizing companies that set ambitious targets.

• Remove requirements that companies disclose competitively sensitive information about the internal tools they use to understand and plan for climate risks, scenarios and activities.

Many of course see it differently and strongly support the proposed rules.

For its part, NAM says it has engaged in a number of lobbying efforts to stop the rules from being implemented, including making revising the climate rule a focal point of the NAM’s corporate finance agenda.

“Manufacturers are leaders in responding to climate change and in informing investors about this critical work, but the SEC’s climate rule is simply unworkable,” said NAM Vice President of Domestic Policy Charles Crain.

Any thoughts on this NAM's position on this? Let us know your thoughts at the Feedback section below.




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