ABA requires considerable modifications to SEC environment danger disclosure structure

Warning that the company is going far beyond its required, the American Bankers Association today week prompted the Securities and Exchange Commission to substantially modify—or withdraw entirely and repropose—its comprehensive environment danger disclosure structure for public business. The proposition needs disclosure of a registrant’s direct GHG emissions (scope 1), indirect emissions from acquired energy (scope 2) and indirect emissions from activities upstream and downstream in a registrant’s “value chain,” if product (scope 3, which would consist of “financed emissions” in a bank’s loaning portfolio).

In a remark letter reacting to the proposition, ABA kept in mind that “these requirements go far beyond the SEC’s mandate to protect investors,” and stressed that “new standards for climate-related disclosures and accounting must conform to the long-held definition of materiality and also be scalable to the size and complexity of the registrant.” ABA included that offered the nascent state of environment danger management, existing greenhouse gas accounting assistance, practices and metrics are restricted. With this in mind, “a final rule must limit disclosure requirements for Scope 3 emissions . . . and sufficient safe harbors and transition time must be provided,” the association stated.

ABA prompted the SEC to change its proposed structure with one that is “principles-based and scalable” depending upon a business’s size, company design, market, how its product and services suit its worth chains and the environment risks it deals with. “Only with this flexibility will new, prospective and existing registrants be able to comply without significantly impairing their ability to compete in the marketplace,” ABA stated.


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