The U.S. Securities and Exchange Commission (SEC) has ushered in a new era of transparency and corporate responsibility with its recently adopted SEC climate disclosure rules.
As environmental, social, and governance (ESG) pressures continue to reshape the global business landscape, these SEC climate disclosure rules aim to establish a consistent and reliable reporting standard for public companies. The newly mandated rules have sparked a wave of responses across industries, particularly concerning the treatment of Scope 3 emissions. These changes highlight a significant shift in how businesses must navigate the complexities of ESG reporting and climate accountability.
A Milestone for ESG Policy in the U.S.
For years, investors and climate advocates have called for clear, mandatory climate disclosures to support more informed financial decisions. The SEC’s final rule, adopted in March 2024, marks a milestone in meeting these demands. Under the new guidance, public companies are required to disclose their Scope 1 and Scope 2 greenhouse gas (GHG) emissions if they are material to the company’s financial outlook. While Scope 3 emissions—those stemming from a company’s value chain—were excluded from the final ruling, the debate surrounding their omission continues to dominate ESG discourse.
By narrowing the scope of disclosure requirements, the SEC attempted to strike a balance between providing meaningful information and avoiding undue burden on registrants. This decision, however, left many sustainability professionals questioning whether the ruling adequately addresses the full climate impact of corporate activity.
The Scope 3 Dilemma: A Risky Omission?
Scope 3 emissions often represent the majority of a company’s carbon footprint, especially in sectors like transportation, food production, and manufacturing. Their exclusion from the SEC’s rule has drawn criticism from sustainability leaders, who argue that the lack of downstream accountability weakens the integrity of corporate climate reporting.
Tim Mohin, a former chief sustainability officer and ESG thought leader, calls this a “missed opportunity.” He suggests that while the rule is a strong step forward, it stops short of aligning with global disclosure frameworks such as the EU’s CSRD or the ISSB standards, which mandate more comprehensive emission tracking, including Scope 3.
Nevertheless, many businesses have voluntarily chosen to disclose their Scope 3 emissions as part of their broader sustainability strategies. This proactive approach reflects growing stakeholder expectations and the recognition that credible climate leadership cannot exist without addressing supply chain impacts.
New Challenges, New Accountability
Beyond emissions, the SEC climate disclosure rules mandate companies to discuss the material impacts of climate-related risks on their strategy, operations, and financial planning. Companies must also disclose governance structures in place to oversee climate-related issues. These elements not only reinforce the financial relevance of climate risk but also push ESG from the realm of optional reporting into a new regulatory reality.
For many organizations, compliance with the SEC’s rule will require a fundamental shift in how they manage and communicate climate-related risks. Finance, legal, and sustainability teams will need to work in tandem to ensure that the required data is accurate, auditable, and actionable. As such, we are likely to see increased investment in ESG technology platforms and cross-functional training initiatives in the coming months.
Looking Ahead: Preparing for 2025 and Beyond
The SEC’s climate disclosure rules may not be perfect, but they represent a pivotal moment in the evolution of corporate ESG accountability. With investor expectations growing and international standards becoming more stringent, the pressure on companies to lead with transparency and integrity is not going away. While the omission of Scope 3 emissions raises valid concerns, the rule’s emphasis on financial materiality, governance, and forward-looking risk assessment should not be underestimated.
As the ESG landscape continues to evolve, business leaders and professionals will need to stay ahead of regulatory developments, implement data-driven solutions, and build internal capacity for climate-related decision-making. Fortunately, there are resources designed to help meet this challenge.
En Academia de Sostenibilidad offers a range of cursos en línea certificados that address the complexities of ESG and climate disclosure in 2025 and beyond. These programs are tailored for professionals seeking to deepen their expertise in sustainability strategy, reporting standards, and stakeholder engagement—essential skills for navigating the next phase of climate regulation.