The SEC’s climate rules may push action from disclosure to accounting

Here’s a note from Alison Taylor about this “ImpactAlpha article“:

An excellent analysis of the SEC’s climate disclosure rule here from Andrea Riquier at ImpactAlpha with thoughts from me. Free to read, though you do need to register.

One big theme I’ve seen in the disappointed commentary is an expectation that this rule ought to be able to do magical things it isn’t designed to do. It’s a workhorse, not a sparkly unicorn! 🦄

And actually, the less sparkly the better. 🐴🐴🐴

“NYU’s Alison Taylor, author of “Higher Ground: How Business Can Do the Right Thing in a Turbulent World,” added that Scope 3 regulations could have favored big companies able to manage the complex reporting requirements. “We turn this into a compliance problem. We give everybody an excuse to take another 10 years trying to calculate this to the last decimal,” Taylor told ImpactAlpha.

Still, companies that want to lead, and those in particular industries, like fossil fuels, should face an expectation that they disclose their Scope 3 emissions, she said. Regulations adopted in the European Union as well as California, are stricter than the ones passed by the SEC.

“We should not consider regulation to be a magic bullet,” Taylor said. “I don’t think disclosure drives the kind of accountability people think it does.””

I love the framing of the article, that this will push climate from reporting to accounting. This is a great way to think about it!