The Securities and Exchange Commission has dropped a requirement that companies report agricultural supply chain emissions.

The proposed rule requiring publicly traded companies to disclose greenhouse gas emissions along their supply chains had concerned agricultural producers for nearly two years.

The final rule, released March 6, eliminated the requirement that companies report ag supply chain emissions, categorized as Scope 3 emissions

The proposed rule, called the Enhancement and Standardization of Climate-Related Disclosures for Investors, was proposed in March 2022 and published in the Federal Register the following month.

It required publicly traded companies to report their direct emissions, called Scope 1; emissions primarily resulting from the generation of electricity they consume, called Scope 2; and all other indirect emissions, called Scope 3.

Farm concerns

Farm groups were concerned about Scope 3 reporting, saying it would include emissions by the vast majority of farmers and ranchers — as they provide almost every product that goes into the food supply chain.

Farm groups opposed the Scope 3 reporting, contending it would be extremely expensive, invasive and burdensome if not altogether impossible for small and mid-sized operations.

SEC Chairman Gary Gensler had publicly stated privately owned farms and ranches would not be included in the rule’s reporting requirements. But farm groups were wary unless that reporting was eliminated or agricultural production was explicitly excluded.

SEC response

American Farm Bureau Federation said in a press release SEC responded to its concerns and affirmed regulations intended for Wall Street should not extend to America farm families.

“AFBF thanks SEC Chair Gary Gensler and his staff for their diligence in researching the unintended consequences of an overreaching Scope 3 requirement,” said Zippy Duvall, Farm Bureau president.

“Farmers are committed to protecting the natural resource 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,” he said.

The National Cattlemen’s Beef Association said in a press release Scope 3 reporting could have increased burdens on family farms and ranches whose beef is processed or sold by publicly traded companies.

Unnecessary burden

“This limited SEC rule is a win for American farmers and ranchers,” said Mark Eisele, a Wyoming rancher and NCBA president.

Cattle producers have a track record of sustainability and conservation, and EPA data confirms that beef cattle are responsible for just 2% of total U.S. greenhouse gas emissions, said Mary-Thomas Hart, NCBA chief counsel.

“With industrywide emissions data already available from EPA and the USDA Life Cycle Assessments, forcing individual farms and ranches to calculate and report emissions creates a costly and unnecessary burden,” she said.