CalSTRS says Scope 3 should be included in SEC’s disclosure requirements

The pension scheme California State Teachers’ Retirement System (CalSTRS) has issued a statement arguing that the US Security and Exchange Commission (SEC) should include scope 3 emissions in its proposed emissions disclosure requirements for public companies in the US. Aeisha Mastagni, CalSTRS’ sustainable investment and stewardship strategies’ portfolio manager said that, “while the SEC’s proposed climate disclosure rules would provide more reliable, consistent and comparable information to investors, inclusion of all company emissions would provide a level playing field for investors to better understand how climate impacts risk and return across our global investment portfolio”. Scope 3 disclosures, which are emissions attributable to a firm’s value chain, have been the focus of debate among investors. Investors against the inclusion of scope 3 argue that estimating these accurately is difficult while those in favour argue that meaningful progress on reducing greenhouse gas emissions is only possible if companies measure their scope 3 emission footprint.