Securities and Exchange Commission Scope 1 and Scope 2 Reporting Requirements

Measurement and reporting of sustainability efforts certainly are a core of Gevo’s business as a producer of high-value nutritional products and advanced renewable fuels and low-carbon chemicals. But the verification and value of these metrics are also expected to translate across a wide spectrum of the economy.

Publicly traded companies, as part of the Security and Exchange Commission’s Scope 1 and 2 reporting, which, if fully adopted as drafted, will require businesses to document and report emissions associated with their business.

Scope 1 requires disclosure of direct greenhouse gas emissions from business operations. This means emissions related to feedstocks and raw materials, manufacturing, transportation, waste disposal processes, and more, all would need to be measured and reported in verifiable fashion.

Scope 2 places requirements of documentation on indirect emissions from energy use over the entire business system, including the purchase of electricity and other energy forms. This means that energy use for lighting, network- and cloud-based servers, heating, and cooling, and other energy loads would need to be assessed by the source of the energy. Renewable energy use and  whether it be solar power, coal-fired electrical generation, and more.

These SEC reporting requirements, if approved, would become part of regular annual filings for publicly traded companies. Under the proposed rule changes, accelerated filers and large accelerated filers would be required to include an attestation report from an independent attestation service provider covering Scopes 1 and 2 emissions disclosures, with a phase-in over time, to promote the reliability of GHG emissions disclosures for investors.