Meeting the New SEC Emissions Policies: We Already Have All the Technology We Need

NORTHAMPTON, MA / ACCESSWIRE / March 20, 2024 / SAP
Feature by Sophia Mendelsohn

Foto: Accesswire

The U.S. Securities and Exchange Commission (SEC) announced new rules requiring many large U.S.-listed public companies to disclose climate-related risks that have a material impact on their financials, operations, or business strategy.

Specifically, companies registered with the SEC now must disclose their Scope 1 and 2 emissions, as in those resulting from both their direct emissions and purchases of electricity and fuel.

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Critics of the ruling say it adds to the burden of reporting to multiple government agencies. Others believe the SEC is not going far enough, as its decision does not require the disclosure of Scope 3 emissions, which are generated by a company's suppliers and customers.

Among the reasons the SEC decided against mandating the disclosure of Scope 3 emissions was the potential difficulty in collecting and measuring this data as well as potential high costs.

At SAP, we embrace the SEC's ruling not just as a regulatory measure, but as a promising avenue for companies to thrive by leveraging technology to harness the power of business data.

We are not merely observing from the sidelines; we are actively partnering with our customers to empower them in accurately monitoring emission, reducing energy costs, and streamlining their business processes.

Our commitment goes beyond compliance - we are dedicated to enabling companies to stay agile in both voluntary and mandatory reporting, recognizing the ever-evolving landscape of emissions disclosure regulations. This sentiment is underscored not only by the recent SEC rule but also by the stringent laws such as the one passed last year in California and the EU's Corporate Sustainability Reporting Directive (CSRD).

SAP has the technology to make Scope 3 emissions accurate, granular, and stable. We are seeing customers adopt digital technologies that will enable them to comply with all existing and anticipated regulatory requirements around the world up and down their value chains to track emissions accurately, including Scope 3, where applicable.

From our experience, sustainability management solutions from SAP can benefit businesses while helping them stay compliant with local and global regulations. SAP makes end-to-end carbon management seamless by embedding it into business processes through a cloud-based enterprise resource planning (ERP) system. This offers companies the ability to create a green ledger by connecting their financial data with accurate and verifiable emissions data. When this data is connected, they can innovate their operations and supply chains to be more sustainable and competitive.