NCBA Fights Against Overreaching SEC Climate Rule

Founded after the wild stock market drops of the 1920s, the U.S. Securities and Exchange Commission (SEC) is the federal agency tasked with regulating publicly traded companies and major investors. From the days of stockbrokers shouting on the floor of the New York Stock Exchange to the rise of digital investing, the SEC has always been a Wall Street watchdog, but recently the SEC reached beyond its authority by proposing a rule that will impact private companies, including agricultural operations.

In March, the SEC proposed a sweeping climate rule that would indirectly require private businesses, like family farms and ranches, to collect and report GHG emissions data.

“The SEC is far beyond their statutory jurisdiction by proposing a rule that could impact thousands of small businesses, farms, and ranches across the United States,” said NCBA Environmental Counsel Mary-Thomas Hart. “The SEC has no sense of how this onerous rule will burden farmers and ranchers.”

The proposed rule would require publicly traded companies to report their scope one, scope two, and scope three emissions. Scope one emissions are direct greenhouse gas emissions, like those coming from factories, stores, or trucks. Scope two emissions count energy and electricity use. Scope three emissions count emissions from each step of a company’s supply chain — scope three is where cattle producers are at risk.

“Picture a steakhouse serving beef or a grocery store stocking the meat counter. Those companies would need to report not only their direct emissions from the restaurant or store but also the emissions from every producer who sold them beef, including cow/calf operators, stockers, backgrounders and feeders,” said Hart. “The entire cattle industry could be impacted by this rule.”

Measuring emissions from individual operations is already difficult, if not impossible, and estimates will likely be incorrect. This also poses another risk in the form of legal liability. If publicly traded companies or their shareholders feel that farm level emissions data is incorrect, producers could be liable to lawsuits.

On average, publicly traded companies are spending more than half a million dollars on climate disclosures, according to a survey of companies conducted by the SustainAbility Institute by ERM1. As investors and activists push companies to provide more climate data, the cost to comply with these requirements is only expected to rise. These costs are vastly higher than what producers can afford, and compliance requires attorneys and consultants to understand complex climate disclosure rules.

“With producers facing rampant inflation and soaring input costs, another complicated, expensive climate rule is unaffordable. NCBA has urged policymakers in Washington to focus on addressing the real issues hurting producers now, rather than try to craft massive new environmental rules,” said Hart.

Since the rule was first announced, NCBA has taken swift action to push back on the SEC. NCBA submitted comments on the proposed rule urging the SEC to limit the rule to only direct and energy emissions from publicly traded companies and completely remove the scope three (supply chain) requirement that emissions from cattle operations would be counted under. NCBA also highlighted that the federal government already collects industry wide emissions data through the Environmental Protection Agency’s (EPA) annual Greenhouse Gas Emissions inventory and U.S. Department of Agriculture (USDA) Life Cycle Assessments. This data is how we know the cattle industry is sustainable because the data continually shows that greenhouse gas emissions from cattle account for just two percent of total U.S. emissions.

“This existing data should more than satisfy any emissions reporting requirement from the cattle industry,” said Hart.

Adding to the list of problems with this rule is its impact on farmer data privacy. Previous Supreme Court cases like American Farm Bureau Federation v. EPA solidified the idea that producers have the right to keep operational data private. Cattle production varies widely between regions and even between neighboring operations, and producers should be able to keep their practices private to keep producing high quality cattle. The SEC rule would force the release of personal business information, placing privacy at risk.

With the many issues this rule would pose to the cattle industry, ensuring the SEC heard directly from individual cattlemen and women was a top priority. NCBA launched a grassroots campaign that provided a way for producers to submit comments directly to the commissioners of the SEC and members of Congress. In just a few short weeks, over [6,700] messages were sent to policymakers, sending a strong message that this overreach proposal is harmful to agriculture.

“Hearing from grassroots cattle producers — the people who would be impacted every day — is incredibly important,” said Hart. “The people writing these rules spend their day behind a desk in Washington and don’t understand the day to day realities of life on the farm or ranch. Sharing your story is essential.”

NCBA will always lead the fight against overreaching regulations and ensure that cattle producers have the freedom to thrive and build successful operations.

Reference 1www.erm.com/news/survey-revealscosts-and-benefits-of-climate-relateddisclosure-for-companies-and-investors/

S.C. CharolaiS NewS

By GEORGEANNE WEBB S.C. Charolais Association

Sorry for no article last month, but I was having a lot of back problems, so bad that I was not able to attend the Southern Connections Sale in Knoxville. I sent David with Sammy Callahan to chaperone. Reports came back that both behaved themselves very well. I finally got my back problems under control after numerous visits to the chiropractor. I also learned that I cannot pick up things that are real heavy unless I want to pay the consequences.

I am writing this right after the Fourth of July. I hope by the time you read this, we have some rain. If not, we are in big trouble. It has not rained here in weeks. We watch the clouds come in with thunder roaring, but not a drop of rain. We are feeding our winter hay and have no idea what we are going to do this winter. Pray for rain as many are going to suffer this winter.

Most of the Charolais folks are headed to the United Kingdom for the World Congress. We couldn’t afford to go since fertilizer and fuel have taken all of our money. I hope all who went have a great time.

Did you vote? I did, but anyone who knows me knows I am not happy with who got elected. Not to mention any names, but we are going to have to do a better job getting some folks elected and others out of office.

The S.C. Beef Co-Op has been formed, and they elected me as president. Some folks think Trump has a big mouth. Well, let me tell you, they ain’t seen nothing yet. We are working hard to get a beef processing plant in South Carolina for the cattlemen to use. If you would like information and would like to join, email wagyu4you@gmail.com, and Gwen McPhail will email you the info and a form to join. We are working hard for the cattlemen in South Carolina, and who knows, a processing plant may not be the end of the causes we take up.

I have a question for the bunch at Clemson University. Since all the good people have retired, I don’t know a soul over there to ask, so someone please get in touch with me. Rumor has it, and mind you, this is only a rumor, but several folks have told me that Clemson wants to put a processing plant in the lower part of the state. That makes no sense to me since the last time I checked, Anderson County has the most cattle in the state, and most of the cattle in the state are from Columbia to the upstate. That would not seem to benefit anyone from the upstate. It would make more sense to put one in the middle of the state to help everyone out. As I said, this is just a rumor I have heard from numerous people, so someone in authority (and I don’t know who that would be) needs to deny or verify.

Some of us are just trying to help our fellow cattlemen, just like when people call me for bulls, and I don’t have any. I start calling people I know and find folks a bull. There’s nothing in it for me, just helping out folks. If we don’t help each other, nobody else is going to help us.