Opinion: The SEC’s new climate disclosure rule could harm our nation’s food supply chain

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Federal regulators like the Securities and Exchange Commission are rarely on the minds of America’s family farmers. Unfortunately, this could soon change as the SEC is hawking a proposal that will directly affect rural communities and farmers across the country if enacted.

The SEC’s proposed rule requires public companies of all sizes to disclose their “climate-related risks” by tracking and reporting their direct and indirect greenhouse gas emissions to investors. Why should farmers care? Simple. The proposed rule requires public companies to disclose their Scope 3, or “indirect” greenhouse gas emissions. Indirect emissions are those that result from activities from assets not owned or controlled by the publicly traded entity. However, in order to do business with larger publicly traded companies, small farms will be required to disclose large amounts of emissions information despite not being publicly traded themselves.

Unlike large corporations, small farms do not have robust compliance and legal departments. Imposing burdensome reporting requirements could disqualify small, family-owned farms from doing business with larger companies, thus forcing farms into the untenable position of being gobbled up by a larger company or having to shut down entirely. The result of farm consolidation is less competition and higher prices. Consumers will pay for their food and groceries at a time when inflation is sitting at a record high of 9.1%. The last thing consumers need is another increase in food prices.

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