Daily Column – 22nd March 2022

To show that they care about the environment, companies will now have to say how many tonnes of CO2 they produce each year. This is the first time that companies will be required to say how many tonnes of CO2 they produce each year.

Yesterday, Wall Street’s top regulator gave it the go-ahead for a new rule that would require public companies to tell the public about both their emissions and the risks that climate change poses to their business.

Gary Gensler, the head of the SEC, said that the goal is to make it easier for businesses to report their role in climate change. That would give you:

Businesses will have more information about what they need to tell people.

Investors who look at a company’s sustainability record when they make investment decisions will have more information to look at.

Because of that, many companies have already shared their emissions numbers with the public. Their reports match up about as well as this season’s Love Is Blind couples. Without clear rules, their reports don’t match up very well either.

Ford, for example, shows emissions from its entire fleet of cars, as well as emissions from the production and use of its cars. Production of Tesla’s Model 3 electric car emits a lot of CO2, according to The Washington Post.

But can the SEC?

They say that the SEC doesn’t have the power to be a climate cop, and they plan to fight the rule in court. Opponents say that emissions disclosures aren’t important to investors’ decisions about whether or not to buy or sell stocks, and the real goal of the rule is to fight climate change, a group of Republican lawmakers said in a letter to Gensler.

Gensler says that investors with $130 trillion in assets under management have already asked companies to show how they plan to deal with climate change. That’s a big deal.

Looking at the next few years…

After 60 days, the SEC will hear from the public and make a final decision in a few months. But legal problems could make it take a lot longer to get it done than that.

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