Proposed SEC Rule Requirements Nearly Impossible for Family Farms - June 17, 2022
WASHINGTON, June 17, 2022 – The American Farm Bureau Federation warned the Securities and Exchange Commission (SEC) June 17 about the consequences to rural America of the SEC’s proposed rule, “The Enhancement and Standardization of Climate-Related Disclosures for Investors." The proposal would require public companies to report on Scope 3 emissions, which are the result of activities from assets not owned or controlled by a publicly traded company but contribute to its value chain. While farmers and ranchers would not be required to report directly to the SEC, this regulation would impose additional burdens as they provide almost every raw product that goes into the food supply chain. The comments were filed on behalf of AFBF and 10 other agriculture organizations. The organizations state, “Our organizations and our members are committed to transparency in climate-related matters to inform our stakeholders in a manner consistent with existing practices in the agriculture industry. However, without changes and clarifications, the Proposed Rules would be wildly burdensome and expensive if not altogether impossible for many small and mid-sized farmers to comply with.” AFBF President Zippy Duvall said, “Farmers and ranchers are committed to feeding America’s families while protecting the resources they’ve been entrusted with. We’re doing this through voluntary, market-driven incentives, but this proposed rule threatens that progress. “Family farms don’t have teams of compliance officers and attorneys to respond to Wall Street. Higher costs could keep small farms from doing business with publicly traded companies, which could lead to more consolidation and fewer farmers at a time when the world is increasingly calling on rural America to meet the needs of hungry families.” Recommendations to the SEC include:
- Removing the “value-chain” concept from the proposed rules;
- Removing or substantially revising the Scope 3 emissions disclosure requirement to include an explicit exemption for the agricultural industry;
- Removing the requirement that registrants provide disclosures pertaining to their climate-related targets and goals;
- Revising the proposed rules so that disclosures of GHG emissions operate in unison with existing federal emissions reporting programs;
- Ensuring the final rules do not include location data disclosures for GHG emissions, which may inadvertently disclose the private information of family farms.