The Securities and Exchange Commission will make all publicly traded companies disclose their greenhouse gas emissions and climate risks as part of a push to hold business accountable for contributions to global warming.
The new rules will give consumers and investors more insights into how the companies whose products they buy and back are contributing to global warming or working to fight it, according to a. report in The Washington Post.
Planned for a Monday release, the new rule would impact hundreds of businesses and force them to measure and disclose greenhouse gas emissions.
It's a huge move for transparency and could allow companies to finally come to terms with the ways in which their businesses are contributing to climate change and affecting the lives of their consumers.
A recent NASA chart displays how industrial activity has changed global temperatures over the last one hundred years. And the overhaul of corporate disclosure laws would be an attempt to get business to reckon with their role in accelerating a changing climate.
The move is happening against a backdrop of weather-related disasters that have cost businesses over $145 billion in 2021, according to National Oceanic and Atmospheric Administration data cited by The Post.
As these costs continue to mount, investors in public companies want to know how corporations are proposing to address these risks to businesses and stakeholders' livelihoods.
Beyond those concerns, there are also risks that billions currently invested in fossil fuels could become "stranded" or disappear as governments around the world move away from the energy source. “These disclosure rules are critical to ensuring that Wall Street cannot continue to get away with making investments that exacerbate the climate crisis,” Sen. Elizabeth Warren (D-Mass.) said in an emailed statement to the Post. “The American people and financial investors have a right to know the risks of these investments, and it’s taken far too long for the SEC to take action.”
Standardizing disclosure requirements will also make it easier for investors to distinguish greenwashing from real environmental practices. Some businesses, like Coca-Cola, totals emissions generated by facilities, suppliers and customers, but lionized climate businesses like Tesla, only report the emissions generated for a single line of cars, as the Post reported.