Beef Buzz News
NCBA's Mary Thomas Hart Wants to Push Back Proposed SEC Reporting RuleWed, 25 May 2022 10:41:24 CDT
Mary Thomas Hart, National Cattlemen"s Beef Association"s Environmental Counsel discusses the Security Exchange Commission"s greenhouse gas reporting rule. During Hart"s interview on the Beltway Beef Podcast, she explains how this rule will create legal liability for producers and why the NCBA aims to derail it.
"The security and exchange commission is looking at requiring publicly traded companies to come up with numbers on greenhouse gas emissions and to demand those numbers from the supply chain," Hart said. "That can include agricultural producers."
According to Mary Thomas Hart, there are many reasons this could be destructive for the agricultural industry.
"It has been a steep learning curve for me," Hart said, "I think it is a steep learning curve for everyone in the agricultural industry because the agricultural industry, by large, has never been regulated by the Securities and Exchange Commission, but that could change."
In March, Hart said the SEC proposed a rule that would mandate greenhouse gas emissions reporting for all publicly traded entities. Those mandated reports include scope 1 (direct emissions), scope 2 (electricity and energy generation emissions), and scope 3 (supply chain emissions).
"That means any publicly traded company that sells beef could be required to send greenhouse emissions reports to the SEC that include emissions from the cattle supply chain," Hart said. "The Federal Government has worked for years to figure out how to calculate those emissions with very little success."
The mandated reporting requirements put farmers and ranchers at legal liability, Hart said, because there is no way to accurately calculate and report those emissions.
"New agency, new rule, but same problem," Hart said.
Hart explained that when cattle producers sell their beef to a publicly-traded company, the company will have to acquire information about the cattle producer"s carbon footprint.
"I think it is important to highlight that farmers and ranchers will not be on the hook for directly reporting to the Federal Government," Hart said.
If producers are in the supply chain of a publicly-traded company, Hart said the company will be required to report their emissions to the SEC and make that information available to their shareholders.
"McDonald"s is a good example," Hart said. "McDonald"s would have to report the emissions from their supply chain, which is a massive supply chain, so when you talk about emissions for beef production, you are talking about emissions from the animal, emissions from everything that the animal consumed, and emissions to grow the things that the animal consumed."
Hart said the information required will go all the way back to the fertilizer that fertilizes the corn and feeds the animal before it is processed.
The SEC is making these demands with the goal of enforcing environmental responsibility.
"When the SEC writes a rule, they do it in response to shareholder desire," Hart said. "In recent years, we have seen shareholder and publicly traded companies become more focused on supply chain impacts and how that supply chain impacts the risk of the company of which they are a part-owner."
Hart said the SEC has attempted to slowly expand its reach to smaller, privately-held entities.
"The latest example of that is shareholders who are environmentally sensitive, and who want to make sure they are investing in a sustainable company, want to be aware of the climate-related risk of the company they are a part-owner of," Hart said. "It always comes back to climate rights, so the SEC is attempting to gather this information so that shareholders can make investment decisions related to climate change."
Click the LISTEN BAR below to hear more from Mary Thomas Hart on the SEC"s proposal of a greenhouse gas reporting rule.
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