On January 24, 2024, Senators Tester (D-Montana) and Sinema (I-Arizona) submitted a letter to the SEC concerning the SEC's proposed “Climate Disclosure Rule,” which would mandate, among other things, disclosures of greenhouse gas emissions. Specifically, the senators expressed concern about “creat[ing] new regulatory burdens for family farmers and ranchers,” in particular that “the proposed rule's Scope 3 emissions reporting requirements could indirectly penalize small agriculture producers for doing business with publicly traded companies.” (Such an indirect penalty would consist of publicly-traded companies choosing to do business with large agriculture producers, who could more easily generate the greenhouse gas emissions data that a publicly-traded company would now need to disclose under the Climate Disclosure Rule, as Scope 3 greenhouse gas emissions include the emissions of both suppliers and customers.) The Senators advocate the position that “[i]f it is not possible to develop Scope 3 in a way that does not burden small businesses in a public company's supply chain, including agricultural producers, it would be better to take it out of the final rule altogether.”

This letter--sent by two of the most moderate members of the Democratic caucus in the Senate--is highly significant. The SEC's proposed Climate Disclosure Rule has already been extensively criticized by Republicans and business groups, many of which have seized upon the proposed disclosure of Scope 3 greenhouse gas emissions as particularly problematic. This critique is now being echoed by those nominally aligned with President Biden's regulatory agenda, and signals that the support for the SEC's proposed Climate Disclosure Rule--or at least elements of said rule--may be ebbing or, at the very least, not especially robust. Thus, this letter could signal to the SEC--which is still in the process of finalizing the rule--that certain changes, including the elimination of the Scope 3 greenhouse gas emission disclosure obligation, should be implemented before the Climate Disclosure Rule is promulgated.