Trucking Critical of SEC Emissions Report Proposal

Cummins plant
Workers assemble diesel engine components at a Cummins plant. The engine maker believes the proposed disclosures are important, but execution could be burdensome. (Luke Sharrett/Bloomberg News)

[Stay on top of transportation news: Get TTNews in your inbox.]

A proposal by the U.S. Securities and Exchange Commission that would require public companies to report their greenhouse gas emissions to the agency was criticized in written comments by a handful of truckers and their trade organizations.

The SEC rule change, first announced in March, would require registrants to include certain climate-related disclosures in their registration statements and periodic reports, including information about climate-related risks that are reasonably likely to have a material impact on their businesses.

The agency received more than 10,000 written comments on the proposal, coming from a variety of entities including big and small investors, business groups, environmentalists, bankers, think tanks, U.S. senators, professors, real estate agents, universities and even a high school student.



SEC Chair Gary Gensler has said the regulation 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.”

But in comments on the proposed rule, American Trucking Associations expressed concern about the consistency of material Scope 3 data contained in both filings or in Environmental, Social and Governance reports. The agency defines Scope 3 emissions as those greenhouse gas emissions from upstream and downstream activities in a company’s “value chain.”

“Even with a myriad of industry tools and metrics, consistency and reproducibility of Scope 3 emissions profiles remains a work in progress,” ATA wrote, noting that one freight hauler said the proposed reporting requirements could quickly become “an exercise in futility.”

“Given the subjective definition of materiality, investors cannot truly differentiate financial risk between one investment over another without universal industry metrics, reporting tools, and reliable and accurate data. ATA has serious reservations involving the consistency of material Scope 3 data contained in both filings or in ESG reports,” ATA said.

Engine maker Cummins Inc. said it believes the disclosures as proposed by the SEC are important, but the execution of them could be burdensome, confusing to stakeholders, and time intensive.


“For example, Cummins already provides detailed company data once finalized and audited on capital spend and Scope 1, 2, and 3 emissions through regular reporting with CDP,” Cummins wrote. “It is currently unclear from the proposal how Cummins would need to change some of these disclosures and whether there would be an associated benefit to investors and other stakeholders. Cummins and other companies need more definitive guidance and recognition of existing practices to better direct resources and time to the appropriate and most meaningful areas.”

“In our opinion, the proposed rule as currently drafted amounts to an unfunded and unwieldy mandate on public companies without a commensurate benefit to investors,” wrote Schneider National Inc. “The proposed rule will impose significant expense, lead to disclosure of unreliable information, invite costly litigation, and will alter the services Schneider is currently providing.” It added that the proposal “unduly interferes with business management decisions and corporate governance.”

“While large carriers and other publicly traded companies may say they already report this type of data, or have the ability to do so, small carriers or single-truck owner-operators would incur significant costs and responsibilities that may fall on a single person,” wrote the Owner-Operator Independent Drivers Association. “Therefore, we are concerned that this rule could generate significant reporting requirements for our members. While the rule provides flexibility for registrants subject to SEC reporting requirements, it should clarify that small-business entities receiving requests from publicly traded companies for information to comply with this regulation should have flexibility as well.”

The U.S. Chamber of Commerce commented: “We are concerned that the proposed rules, when viewed holistically, do not strike the right balance and may, in fact, prove counterproductive by mandating that companies produce extensive amounts of information that is not material, thus obscuring for investors what is most important to making informed voting and investment decisions and creating confusion and misimpressions. This is not consistent with the SEC’s long-standing tripartite mission and its stated goals in issuing the proposed rules.”

The Chamber added, “The current proposed rules are vast and unprecedented in their scope, complexity, rigidity and prescriptive particularity, and exceed the bounds of the SEC’s lawful authority as proposed.”

Want more news? Listen to today's daily briefing above or go here for more info

The National Retail Federation also was critical of the proposal.

“NRF supports climate-related reporting that results in comparable, consistent and reliable information that is useful for investors. Unfortunately, however, in its current form, the proposal contains elements that are unworkable and may even defeat the goals the Commission seeks to achieve,” NRF wrote.

“Aspects of the proposal conflict with many of the accepted approaches to reporting on climate-related objectives and emissions without improving them. Moreover, the proposal creates the likelihood that investors will face a flood of information in SEC reports that will make the reports difficult to mine for truly consistent and comparable information,” it added.