By Shelby Shank
Field Editor

A bill was introduced this month that would block the Biden administration’s efforts to require publicly traded companies to disclose greenhouse gas emissions in their value chains.

The bill was introduced by U.S. Reps. Vicente Gonzalez and Ronny Jackson of Texas. It’s related to the Scope 3 emissions addressed in the Securities and Exchange Commission’s (SEC) proposed rule that mandates extensive climate disclosures for companies while placing a significant regulatory burden on small and medium-sized entrepreneurs like farmers and ranchers.

The proposed rule would have an effect on farms and ranches across the country.

“Texas Farm Bureau (TFB) and the many farm and ranch families it represents have serious concerns about the SEC’s proposed rule which would mandate extensive climate disclosures by public companies, including measured impacts for their entire supply chain,” TFB President Russell Boening said. “Ultimately, the rule could have severe consequences for farmers’ and ranchers’ ability to produce food, fuel and fiber worldwide.”

The rule could create burdensome reporting requirements for family farms and ranches selling into supply chains and force the disclosure of private information.

It may create multiple, new sources of substantial costs and liabilities. These include reporting obligations, technical challenges, significant financial and operational disruption and the risk of financially crippling legal liabilities.

The proposed rule also could spur consolidation, as small farms lack the resources to comply with burdensome greenhouse gas reporting requirements.

There could also be increased liability because the timeline given is unattainable to comply with Scope 3 emissions, which are the result of activities from assets not owned or controlled by an organization but contribute to its value chain.

“In a time of increased costs and supply shortages, we cannot impose impractical regulatory burdens and costs on those who are integral to our food and national security,” Gonzalez said. “I’m proud to work with Congressman Jackson to re-introduce the Scope 3 Act for South Texas families and small businesses.”

Scope 1 emissions are direct emissions from owned or controlled sources, such as a company vehicle.

Scope 2 covers indirect emissions from the purchase and use of electricity, steam, heating and cooling.

Scope 3 includes all other indirect emissions that occur in the upstream and downstream activities of an organization. This includes business travel, employee commuting, waste disposal, use of sold products, transportation and distribution.

The legislation would block the SEC’s latest attempts to force climate regulations on American businesses.

“While Americans are still struggling with skyrocketing inflation, this proposed rule will only lead to even more bureaucracy and regulatory burden on American businesses,” Jackson said. “Small and medium-sized family operations would be forced to allocate time and finances to disclose business-related data regarding their emissions in an effort to comply with unnecessary climate standards. The Biden administration has weaponized the SEC to promote Environmental, Social, and Governance (ESG) investing, and the American people will bear the brunt of this terrible decision.”

In addition to TFB, the bill is supported by the National Sorghum Producers, Texas Cattle Feeders Association, Texas Bankers Association, Texas Corn Producers, Texas Grain Sorghum Association and American Exploration and Production Council.