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CEBA Praises Landmark Climate Disclosure Ruling as Important First Step

Guidelines for Emissions Disclosures Will Provide Clarity for Energy Customers and Investors

The Clean Energy Buyers Association (CEBA) today welcomed the final rule adopted by the U.S. Securities and Exchange Commission (SEC) that requires public companies to make climate-related disclosures in their registrations and annual reports. CEBA, whose members include nearly one-fifth of the Fortune 500, noted the rule is an important first step in providing clear guidelines for energy customers as well as clarity on climate-related risks for investors.

“The SEC rule makes an essential step toward transparency and action in catalyzing a carbon-free energy system that empowers investors and companies alike to make informed decisions that will accelerate progress towards a 90% carbon-free U.S. electricity system by 2030,” said Kevin Hagen, CEBA’s interim CEO. “CEBA looks forward to working with our more than 400 members to meet these disclosure needs and then helping companies go a step beyond this rule by learning strategies for reducing Scope 3 emissions, through the resources and education CEBA provides.”

The SEC’s ruling was influenced by over 16,000 public comments, and CEBA submitted insights that emphasized the important role of market-based instruments in accounting for and disclosing Scope 1, 2, and 3 greenhouse gas emissions. For most companies, the most significant contributor to their greenhouse gas emissions is found in the sources of electricity they use.

The new rule’s requirements include disclosure of a publicly traded company’s oversight and governance structure for climate risk; the company’s processes for identifying these risks; the company’s Scope 1 and 2 emissions, on a phased-in basis; and any climate-related goals and transition plans the company might have.

In addition to the new SEC rule, many CEBA members are subject to a variety of other stringent climate reporting protocols, including European Union regulations and the new California disclosure law. This has made data tracking as well as climate and energy reporting plans critical for large organizations in their reporting and operational performance.

Disclosure of Scope 3 emissions — including the emissions generated by entities in a company’s supply chain — was excluded from the SEC’s final rule. Supply chain emissions account for more than half of global greenhouse gas emissions and can represent the majority of a company’s total carbon footprint.

CEBA members are finding that going beyond their direct footprint to understand the energy and climate performance of their worldwide supply chain goes beyond reporting and disclosure obligations. They are discovering critical business insights such as their exposure to risks, costs, and supply chain vulnerabilities. And they are finding opportunities to improve performance, reduce costs, and improve supply chain performance. 

CEBA offers deep resources to help our members measure and address energy opportunities and decarbonize their worldwide supply chain. Among those resources, the Clean Energy Buyers Institute, CEBA’s nonprofit research arm, along with leading corporate energy customers last October launched the Clean Energy Procurement Academy to equip companies with the technical readiness to explore and adopt clean energy, an essential factor in global decarbonization.