SEC Chair Gary Gensler testified to the House Financial Services Committee about concerns raised by companies regarding the inclusion of Scope 3 emissions in the SEC’s upcoming climate disclosure rule. Gensler acknowledged the early stage of development and unreliability of Scope 3 reporting, stating that the SEC would consider these concerns when finalizing the rules. Some comments also expressed concerns about the impact on smaller businesses, such as farms and agricultural companies. The SEC released proposed climate disclosure rules in March 2022, requiring companies to provide information on climate risks and their plans to address them, including operational climate footprint and emissions across their value chains. Even if the SEC eases supply chain emissions reporting, other disclosure regimes like California’s climate disclosure legislation and the EU’s Corporate Sustainability Reporting Directive may still require Scope 3 details. Gensler emphasized the importance of accurate reporting under these new rules. The SEC is not rushing the finalization process and has received 16,000 comments on the proposed rules.