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SEC drops its plan to require field-to-fork environmental reporting

Working Lunch: The agency realized the mandate was too unwieldy and extensive.

Federal regulators have dropped plans to require a comprehensive accounting from public companies of how much greenhouse gas is produced at each stage of their supply chain—in the case of restaurant corporations, from production on a farm to the point a customer consumes the item.

The controversial proposal was not included in new reporting requirements issued by the Securities and Exchange Commission last week. Although the final rule will still impose new climate-related disclosure responsibilities on public companies, it omits the provision that had been most alarming to the restaurant industry. That requirement would have obliged the concerns to trace precisely how much greenhouse gas was generated in getting them their supplies. For instance, how much carbon was generated in getting a weekly supply re-up to each of their units?

The information would have to be disclosed to shareholders and prospective investors in annual reports and registration documents for an initial stock offering.

The restaurant business and other industries had objected, saying the mandate was unfeasible and would create a record-keeping nightmare.

The deletion of that provision, known as Scope 3, is a victory for the restaurant business, according to this week’s Working Lunch podcast. Co-hosts Joe Kefauver and Franklin Coley speculated that the SEC saw how huge of an ask they were making and thought better of it.

“It’s very difficult,” said Coley, a principal along with Kefauver in the Orlando, Fla.-based lobbying and consulting firm Align Public Strategies. “Going from zero to a hundred, I’m not going to say it’s impossible, but it’s very hard to do.”

Yet the pair noted during the podcast that the restaurant industry still faces major regulatory issues on other fronts, including an effort to curb or eliminate virtually all restaurant surcharges, from service fees to an automatic gratuity for large parties.

For a review of that issue, plus a review of restaurant-related legislation percolating at the state and local level, tune into this week’s edition of Working Lunch.

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