NCBA advocacy scores win for producers
The National Cattlemen’s Beef Association’s (NCBA) unabating advocacy efforts scored a major win for ag producers at the federal level, when the U.S. Securities and Exchange Commission (SEC) left out supply chain (Scope 3) greenhouse gas (GHG) emissions data in its most recent final rule regarding GHG emissions reporting.
Initially, SEC’s rule would have subjected farmers and ranchers to burdensome emissions reporting requirements.
But, with the help of NCBA engaging with SEC, educating policymakers on unintended consequences and conducting grassroots advocacy efforts, the commission removed the damaging provision in its final rule.
“Earlier today, the SEC finalized a rule which would require GHG emissions reporting for publicly-traded companies,” stated NCBA Chief Counsel Mary-Thomas Hart during an episode of the association’s Beltway Beef podcast, dated March 6.
“One huge shift from the proposed rule to the final rule is it no longer requires Scope 3 emissions,” she says. “When this rule was proposed back in 2022, the SEC originally attempted to create a supply chain emissions reporting requirement which meant farmers and ranchers across the country would have to submit their GHG emissions data.”
Background and NCBA arguments
Hart believes the SEC rule came about in response to increased interest among publicly-traded company shareholders to gain access to more supply chain information.
“The GHG emissions reporting rule is the latest attempt by shareholders to get more information out of publicly-traded companies, and unfortunately, we were just potential collateral damage,” she says.
“But, I think SEC and shareholders quickly realized they woke a sleeping beast when they subjected the ag industry to this reporting rule,” she continues.
Hart further notes over 7,000 NCBA members across the nation – nearly one-quarter of the association’s membership and the highest response they have ever seen – submitted comments and letters to Congress to voice their concerns.
Hart shares NCBA’s primary argument in opposition of the rule was the unnecessary risk and burden it would place on ag producers across the country.
“There is a lot of interest in industry-wide data – a snapshot of how we are doing, how we have improved over time, etc. – which is currently available through the Environmental Protection Agency’s existing GHG Emissions Inventory,” Hart remarks.
According to this resource, beef cattle are only responsible for around two percent of overall U.S. GHG emissions, and since 1960, U.S. cattle producers have reduced their emissions per pound of beef by 40 percent.
Hart points out this isn’t by accident. In fact, it is largely due to genetic improvements, grazing management improvements and access to technology in the feedyard.
“All of these things together means we can maximize our production value and be more environmentally sustainable,” she states.
Further, Hart comments, “When it comes down to getting individual reports from producers, the science just isn’t there. We don’t have a way to accurately measure individual, farm-level GHG emissions, so this rule would be subjecting individual agricultural producers to a reporting requirement they wouldn’t be able to comply with.”
“Then, when they are not able to comply, I think we run the risk of being subject to shareholder derivative lawsuits from publicly-traded companies, which presents an immense legal risk for farmers and ranchers across the country,” she concludes.
The final rule
Hart believes these arguments were well received by SEC and certainly noted in the final rule, which left Scope 3 out of the reporting requirements.
Adopted on March 6, the SEC’s final rule will require direct (Scope 1) and indirect (Scope 2) GHG emissions data to be reported.
Additionally, the rule requires domestic and foreign registrants to include extensive climate-related information in their registration statements and periodic reports, including the disclosure of climate-related risks which have materially impacted or are likely to impact the registrant; the actual and potential material impacts of climate-related risks and the business management’s role in assessing and managing risk.
The rule also requires reporting on the processes used for identifying, assessing and managing climate-related risks; any climate-related target or goal which has materially affected or is likely to affect the registrant’s business and various financial statement effects resulting from severe weather events and other natural disasters.
With SEC’s final rule published, Hart notes ag producers have a day to breathe easy while they wait for the next attack on agriculture to pop up.
“I think there is going to be continued interest from corporate shareholders in getting increased supply chain information,” she shares. “If it isn’t GHG emissions data, it might be another data set related to supply chain and inputs.”
“NCBA will continue to engage with the SEC, and now that we have a relationship with the commission, we can build on this relationship and make sure they understand the unique concerns of cattle producers and other ag producers across the country,” she adds.
Hart concludes, “We will also continue to be mindful of happenings on Capitol Hill, through the EPA and other regulatory agencies, as well as other attempts to subject farmers and ranchers to GHG emissions reporting.”
Hannah Bugas is the managing editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
