The U.S. Securities and Exchange Commission (SEC) has proposed new rule changes that would require registrants to provide climate-related disclosures to the SEC.
It would also require companies to disclose climate-related risks which would be “reasonably likely” to have a material impact on their business, result of operations, or financial condition.
“I am pleased to support today’s proposal because, if adopted, it would provide investors with consistent, comparable, and decision-useful information for making their investment decisions, and it would provide consistent and clear reporting obligations for issuers,” said SEC Chair Gary Gensler.
“Our core bargain from the 1930s is that investors get to decide which risks to take, as long as public companies provide full and fair disclosure and are truthful in those disclosures. Today, investors representing literally tens of trillions of dollars support climate-related disclosures because they recognize that climate risks can pose significant financial risks to companies, and investors need reliable information about climate risks to make informed investment decisions.”
Gensler said that the proposal aims to help issuers more efficiently and effectively disclose climate-related risks, something that is “driven by the needs of investors and issuers.”
The SEC’s proposal lays out a number of specific requirements that companies would have to comply with which would ultimately encompass the crypto space. So far, a few executives in the highly-scrutinized crypto mining industry have spoken in regards to the SEC’s proposal.
“We welcome it,” said Fred Thiel, CEO of Marathon Digital (MARA) told CoinDesk. “We don’t think as a miner, complying with the reporting requirements is going to be necessarily onerous,” he said, adding that the report would add transparency for Marathon’s “shareholders and to the community that we serve.”
Ethan Vera, co-founder and chief operating officer of crypto mining firm Luxor Technologies, said:
“The latest proposed bill by the SEC for public companies to disclose the amount of emissions that they produce will shed light on the miners that aren’t using renewable energy… A growing [number] of public investors have strict ESG guidelines that guide their investment decisions and make them prioritize bitcoin miners that fit in that category.”
Presumably, the increased reporting rules will have some negative effect on miners, especially the smaller companies who will be forced into mountains of new paperwork and tasks. Zach Bradford, CEO of CleanSpark, a mining company focused on using renewable energy, said that having to report detailed records on greenhouse gas emissions may be difficult to comply with.
Some of the SEC’s proposed requirements do seem rather tedious on the surface. For example, part of the proposal suggests that companies report on their greenhouse gas emissions stemming from different sources within their plants, offices, and other operational facilities, and categorize the emissions as either “direct” or “indirect” emissions.
“For example, a registrant might have direct emissions from one or more of the following sources that it owns or controls:
- Stationary equipment (from the combustion of fuels in boilers, furnaces, burners, turbines, heaters, and incinerators);
- Transportation (from the combustion of fuels in automobiles, trucks, buses, trains, airplanes, boats, ships, and other vessels)…”
The proposal will be open for public comment for at least two months before any further moves are made by regulators.