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What is the SEC Climate Disclosure Mandate and How it May Affect Your Organization

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July 19, 2022

3 Minutes


     Dina Adlouni

Dina is the resident Content Writer at EcoOnline North America . When she’s not writing about health and safety, you’ll find her enjoying a cup of tea while watching her favorite sitcom.

What is the SEC Climate Related Disclosure Mandate?

The Securities and Exchange Commission (SEC) has recently proposed a new climate related disclosure mandate, which requires organizations to reveal specific climate change related risks they may face and also confirm their Scope 1, 2, and 3 emissions, amongst other information.  

The goal is to help companies standardize their metrics related to environmental impact, so they can be aware of their greenhouse gas emissions and take steps to manage them. It will also help investors get a clearer picture of the climate change related risks the organizations they chose to work with may face. The new SEC Climate Related Disclosure rules could take effect as soon as 2023, depending on the type of organization. 

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What does this mean for your organization?

If adopted, this means public organizations must disclose standardized data and provide insight into their strategic approach to future climate change related risks. This includes greenhouse gas (GHG) emissions: 

  • Scope 1 emissions include carbon emissions from energy expended by an organization to produce something. This also includes carbon emissions from company vehicles and so on.  
  • Scope 2 emissions refer to indirect emissions produced by an organization with electricity and heating and cooling systems.  
  • Scope 3 refers to indirect emissions from the supply chain and companies your organization may work with. This includes wasted goods which were not used on worksites, commute methods chosen by employees, capital goods, and so on. Not all organizations will have to submit their Scope 3 emissions.  

The new climate disclosure rules are designed to help organizations identify operational risks posed by climate change and also encourage them to develop strategies to reduce greenhouse gas emissions, reducing their negative impact on the environment. 

Introduction of the new rules should also ensure that accurate information will be shared with investors and stakeholders about where your organization stands. Performance against the stated metrics may alter their view of certain companies or persuade them to consider alternative opportunities linked to more progressive sustainability performance. Your organization may gain a competitive advantage by  publicly demonstrating that you have a positive, measurable commitment to approaching issues related to reducing your impact on the environment. 

How EcoOnline Can Help

We can help you prepare for SEC report submission when the time comes, with our robust EcoOnline ESG solution. EcoOnline ESG offers 11 different modules across the environmental, social and governance pillars to help you track and manage data related to topics like carbon emissions, waste, forced labor, and water consumption. All this data can be easily viewed and analyzed in one reporting and analytics view.  

Using  insight derived from the platform , you can effectively identify patterns, anomalies and gaps from which you can devise a strategy to for example, reduce greenhouse gas emissions and cut costs. EcoOnline ESG can help you manage compliance with government and industry regulations and scale your ESG programs across multiple sites and locations. The outputs from the platform will also help you position your organization with investors and showcase your plans to positively impact the environment, the wellbeing of your workforce and other interest groups which are important to you.  

Curious to learn more? Speak to one of our EcoOnline representatives today 

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