Landmark rule requires some companies to share how much they pollute. But it was scaled back

Wall Street’s top regular on Wednesday passed a landmark rule after two years of deliberation requiring public companies to share their greenhouse gas emissions and the risks they face due to climate change. But the new rule was significantly scaled down from its original form after it was met with backlash from business leaders and some lawmakers.

Wall Street’s top regulator on Wednesday passed a landmark rule after two years of deliberation requiring public companies to share their greenhouse gas emissions and the risks they face due to climate change. But the new rule was significantly scaled down from its original form after it was met with backlash from business leaders and some lawmakers. The finalized rule from the Securities and Exchange Commission will no longer require companies to report some greenhouse gas emissions. Still, some business leaders and lawmakers have argued that the rule oversteps the SEC’s mission. Climate activists, though, argue the rule does not go far enough. On Wednesday, SEC chairman Gary Gensler said he thought the finalized rules would “produce more useful information to investors. Far more useful, I think, than what they get today.” Parts of the rule will take effect in 2025 and it comes amid a push by the Biden administration to tackle climate change. “This was a widely expected political compromise in an election year,” Shivaram Rajgopal, a professor of accounting and auditing at Columbia Business School said. The newly adopted rule dropped one of the most contentious elements of the SEC’s initial March 2022 proposal, requiring companies to disclose emissions they are indirectly responsible for, called scope 3 emissions. Scope 3 emissions from an oil company, for example, might be the thousands of metric tons of carbon dioxide produced by gas-powered vehicles, even though oil companies do not produce cars.