Which Scope 3 Emissions Will the SEC Deem ‘Material’?

  • Three categories of Scope 3 emissions — purchased goods and services, use of sold products and investments — contributed over 70% of the total carbon footprint for constituents of the MSCI USA Investable Market Index.
  • We found that constituents of the MSCI USA IMI that report GHG emissions to CDP also considered purchased goods and services and use of sold products to be relevant at rates of 78% and 43%, respectively.
  • The financed emissions could be contentious. Only 2% of financial-sector companies report this category as relevant, while estimates indicate that it accounts for the largest share of GHG emissions for the sector (92%).

As we reported in an earlier blog post, the Securities and Exchange Commission (SEC) has proposed requirements for U.S. listed companies to disclose their Scope 1, 2 and 3 greenhouse-gas (GHG) emissions.1 Requirements to disclose Scope 1 and 2 emissions apply to all companies; but the SEC proposal would require disclosure of Scope 3, or value-chain, emissions only where material and for companies that have set a climate target that includes Scope 3 emissions.

You can now read the full whitepaper at the link below