Apple Advocates for Scope 3 Emissions in Corporate Climate Disclosures

In a significant move towards transparency and accountability, Apple has voiced its strong support for including Scope 3 emissions in corporate climate disclosures. The tech giant's endorsement came in response to California Senate Bill 253, which seeks to require businesses with annual revenues exceeding $1 billion to publicly disclose greenhouse gas emissions associated with their operations.

Here are the key highlights:

Apple's Position on Scope 3 Emissions:

• Apple "strongly believes" that corporate carbon emissions disclosures should encompass Scope 3 emissions, which are emissions stemming from a company's supply chain.
• While acknowledging the challenges in measuring Scope 3 emissions, Apple emphasized their importance in understanding a company's complete climate impact.

Scope 1, 2, and 3 Emissions Defined:

• Scope 1 emissions include emissions from sources owned by an organization, such as those from fuel combustion in boilers, furnaces, and vehicles.
• Scope 2 emissions involve indirect greenhouse gas emissions incurred by a company, like those from purchasing electricity and heating or cooling buildings.
• Scope 3 emissions, the focus of Apple's support, come from a company's supply chain and are often the largest source of greenhouse gas emissions for a company.

California Senate Bill 253 Requirements:

• The bill aims to compel businesses in California with over $1 billion in annual revenue to disclose their Scope 1 and 2 emissions to a reporting organization, starting in 2026.
• Companies would also be required to report their Scope 3 emissions beginning in 2027.
• The bill includes provisions for the state to review and update these rules as necessary by 2030.

Apple's Acknowledgment of Reporting Challenges:

• Apple recognized the complexity of reporting Scope 3 emissions due to limited data availability.
• They emphasized the feasibility of modeling, measuring, and reporting on all three scopes of emissions, underscoring the importance of including Scope 3 emissions in disclosures.

Third-Party Oversight Supported:

• Apple expressed support for third-party oversight of emissions reporting, further ensuring transparency and accuracy.

Federal Regulators and Broader Implications:

• Apple's advocacy for Scope 3 emissions reporting in California coincides with federal regulators considering climate disclosures.
• The U.S. Securities and Exchange Commission (SEC) has proposed rules for disclosing climate-related risks that could impact businesses. However, the implementation and inclusion of Scope 3 emissions remain uncertain.

Call for Parallel Standards:

• Apple noted the likelihood of climate disclosures from other regulatory agencies beyond California and called for parallel standards to minimize duplicative reporting and promote convergence at national and international levels.

Apple's endorsement of Scope 3 emissions reporting reflects a growing commitment to comprehensive climate transparency and aligns with broader efforts to standardize corporate climate disclosures, setting a precedent for other businesses to follow suit.

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