If you want the inside scoop on which companies are serious about addressing their carbon emissions and which aren’t, take a look at the public comments submitted to the U.S. Securities and Exchange Commission regarding its proposed climate rule.
You can tell if a company is serious by its stance on so-called Scope 3 emissions. Depending on the business, Scope 3 emissions might make up a significant majority of a company’s carbon footprint. Such emissions can result from activities and assets a company doesn’t own or control, like leased office space, business travel or end-of-life processing of their products. They also might occur when customers use their products, like when someone drives their gas-powered SUV.
In short, if your company is serious about doing something about climate change, it should probably be estimating its Scope 3 emissions. If it’s making noise about being sustainable, at the very least it probably shouldn’t undermine attempts to make Scope 3 disclosures standard.
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Which is why the comments on the SEC’s site make for some interesting reading. Companies ranging from Walmart and BlackRock to Fidelity, Gap, ExxonMobil and Southwest Airlines have made it clear that they’d rather not disclose their Scope 3 emissions, even with the safe harbor provisions the SEC is offering to limit liability. Those companies are effectively saying that they don’t take climate change seriously enough to fully understand — and disclose — their own impact on it.
There are many, many more companies that I’m not covering here that take a similar stance. So why am I singling these out? Walmart because it’s the world’s largest retailer. BlackRock and Fidelity because they’re the first- and third-largest asset managers. ExxonMobil because it’s the largest non-government-owned oil company. Gap because the company claims it “feel[s] an ethical responsibility to align our goals and strategies with the best science and industry practices,” according to its own climate values page. And Southwest because it is among the largest airlines in the U.S., no matter which measure you use.
Demur and delay
The arguments against disclosing Scope 3 data generally fall into three buckets: Companies complain that the data is too unreliable or uncertain, that it’s too hard to obtain or that it’ll expose them to lawsuits.
The first smells like a classic FUD campaign — fear, uncertainty and doubt. Cynthia Lo Bessette, Fidelity’s chief legal officer, told the SEC that Scope 3 data is “speculative, nascent, unreliable, and there are no current standards to ensure consistent and comparable data.”