After a proposition from the US SEC, some of the largest Canadian oil companies may face having their officially declared carbon footprint balloon in size.
The SEC (Securities and Exchange Commission) had proposed earlier this year that publicly listed companies disclose their total ‘life-cycle’ greenhouse gas (GHG) emissions.
The proposal has not yet been enacted, largely due to strong opposition. If it comes into force, however, it would affect not only publicly listed companies in the United States, but also over 230 Canadian companies that are listed on the US stock exchange.
These include oil and gas supermajors like Imperial Oil Ltd., Enbridge Inc, Canadian Natural Resources Ltd. and others.
As per the new SEC proposal, companies would have to publicly account for not only their Scope 1 and Scope 2 emissions, but for their Scope 3 emissions as well.
Relevant: Big Payday Coming For Carbon Accountants With New SEC Rules
Scope 1 and 2 relate to the emissions produced as a direct result of the company’s operations (Scope 1) and those resulting indirectly through the energy the company uses in order to power its operations (Scope 2)
Scope 3 emissions, on the other hand, refer to the emissions of the entire supply chain, including also by the customers’ use of the company’s products, which focuses on the carbon intensity of the end product.
Hence, for oil companies that would mean they would need to account for the GHG emissions of their products, once they’ve been utilized by consumers.
For example, that would include the gasoline a driver burns in their car.
Read more: SEC Will Now Require Public Companies To Disclose Carbon Emissions And Climate Change Risks
