NMPF Voices Concern with Proposed SEC Climate Rule
July 6, 2022
The U.S. Securities and Exchange Commission’s (SEC) proposed rule mandating extensive climate disclosures from publicly traded companies could undermine the dairy industry’s progress toward its sustainability goals and create far-reaching technical and financial challenges for American dairy farmers and their cooperatives, NMPF said in comments submitted June 17.
“Dairy farmers are on the frontlines confronting the many challenges associated with climate change and remain committed to making progress to reduce the industry’s environmental impact,” said Jim Mulhern, president and CEO of NMPF. “The SEC rule, as written, could hamper our ability to make progress through the industry’s robust, voluntary greenhouse gas (GHG) assessment program, and jeopardize our goal of reaching GHG neutrality by 2050.”
SEC’s proposed rule, “The Enhancement and Standardization of Climate Related Disclosures for Investors”, would require public companies to disclose GHG emissions, including emissions from upstream and downstream activities in its value chain, known as Scope 3. NMPF cautioned SEC in its comments that the inclusion of Scope 3 emissions disclosure within the rule is premature, and risks undermining the extensive efforts the dairy industry has made toward developing trust and buy-in for its voluntary GHG assessment program through the National Dairy Farmers Assuring Responsible Management (FARM) Environmental Stewardship program.
NMPF also pointed out that U.S. dairy farmers have been leading environmental stewards for decades, tending their animals, land and water with great care. Thanks to improvements in productivity, new technologies and evolving best management practices, the environmental impact of producing a gallon of milk requires less water, less land and has a smaller carbon footprint than ever before. Still, the industry remains committed to its continued progress, devoting resources to programs, research and services that advance its 2050 goals to achieve industrywide neutral or better greenhouse gas emissions, optimize water usage and improve water quality.
To track progress and reach these important environmental goals, the FARM Program in 2017 launched the Environmental Stewardship platform. The program provides a comprehensive estimate of GHG emissions and energy use on dairy farms with a suite of tools and resources for farmers to measure and improve their environmental footprint. FARM ES is the dairy community’s platform for a consistent, unified approach to GHG measurement that is free and accessible to all dairy farmers. Currently, over 80 percent of U.S. milk is handled by cooperatives and processors participating in FARM Environmental Stewardship.
NMPF also emphasized the significant financial burden the proposed rule would have on dairy farmers and their cooperatives related to the collection and aggregation of on-farm GHG data.