SEC: no Scope 3 carbon reporting for American farmers 

In the face of strong pushback by farm and industry groups, including the American Farm Bureau Federation, the federal Securities and Exchange Commission passed, on March 6, a carbon emission reporting rule that did not include so-called Scope 3 emissions reporting requirements for farms.

Scope 1 emissions are direct emissions produced by an operation; Scope 2 are those indirectly produced by the use of the product or service; Scope 3 are those found in a product’s supply chain for which the primary producer is not directly responsible.

The SEC had received about 24,000 comments during its comment period, most negative. Companies argued that it is impossible and/or ruinously expensive for organizations to track and report all the possible sources of carbon emissions from third parties in their supply chains.

On its website, the AFBF applauded the move: “The Securities and Exchange Commission responded to the American Farm Bureau Federation’s concerns and affirmed that regulations intended for Wall Street should not extend to America’s family farms. The SEC voted today on its final climate disclosure rule and removed the Scope 3 reporting requirement, which would have required public companies to report the greenhouse gas emissions of their supply chain.”

The SEC had faced multiple threats of lawsuits if the rule had passed, a factor acknowledged by SEC Chair Gary Gensler. “AFBF thanks SEC Chair Gary Gensler and his staff for their diligence in researching the unintended consequences of an overreaching Scope 3 requirement,” said AFBF President Zippy Duvall. “Farmers are committed to protecting the natural resources they’ve been entrusted with, and they continue to advance climate-smart agriculture, but they cannot afford to hire compliance officers just to handle SEC reporting requirements,” the AFBF continued. “This is especially true for small farms that would have likely been squeezed out of the supply chain.

“We thank all those who stood with farmers, including Senators Jon Tester, Tammy Baldwin, and Kyrsten Sinema, as well as Agriculture Secretary Tom Vilsack, all of whom listened to the concerns of America’s farm families and recognized the impact Scope 3 would have had on rural America … The onerous reporting requirements could have disqualified small, family-owned farms from doing business with public companies, putting those farms at risk of going out of business.”