CEOs and boards are doing what they are supposed to do — hedging their bets. The SEC’s new climate disclosure rules are not out yet and are sure to be challenged when they are, but just in case, companies are already adapting their processes and disclosures. Global issues like climate change, where cause and effect transcend the boundaries on our maps, it requires a combination of government action (where there are collective choice problems and information asymmatry) and market-based solutions. This is a good(ish) example.
A sweeping U.S. climate-disclosure rule isn’t yet in place, and it is sure to face legal challenges when it is, but many companies have begun assessing greenhouse-gas emissions from parties in their supply chain as if it were. The Securities and Exchange Commission’s rule—which would require public companies to report climate-related risks and emissions data, including so-called Scope 3 emissions that come from a company’s supply chain—is expected to be brought in soon. The agency issued the proposal in March 2022 as President Biden’s efforts to address global warming through legislation stalled in Congress.SEC’s Climate-Disclosure Rule Isn’t Here, but It May as Well Be, Many Businesses Say – WSJ