Issue link: http://palletcentral.uberflip.com/i/1503288
PalletCentral • May-June 2023 35 already under management in ESG-linked products (rising 525% between 2015-2019 alone according to Morningstar), and "Green" funds have a superior return on investment historically. While the SEC proposed rule targets those directly under its regulations – the publicly traded entities – its proposed rule would have a significant downstream impact on the private corporate sector, because those covered by SEC rules will have to disclose not only their own gas emissions, but also those of their suppliers and partners – "Scope 3 emissions." is would include most areas of the supply chain including logistics and the pallet industry. What could be the real-world impact of the forthcoming SEC/ESG rule on private companies that provide goods or services to larger public corporations? It is likely that fuel consumption impact will be one critical criteria (both for the public entity and its selection of downstream supply chain vendors) – simply because it is a criteria that is easy to measure, unlike trying to compare disparate compliance standards and carbon emissions from various industries. Eventually, companies will need to measure emissions at all levels: Scope 1 (their own direct emissions), Scope 2 (energy purchases), and Scope 3 (the extended supply chain). Downstream companies should start evaluating their environmental impact, beyond measuring and controlling greenhouse cases, and consider their contribution to pollutants such as nitrous oxide and sulfur oxide, and use of non-biodegradable materials including plastics and rubber. is could also create a business advantage for those marketing and utilizing wooden pallets, rather than the plastic variety, in the supply chain. It will also be critical to stay abreast of regulatory changes at the federal and state level impacting ESG requirements. Some aspects of the ESG initiative also interface with the OSHA/NIOSH initiative called "Total Worker Health" which examines the role employers can play in assisting workers including everything from DEI to environmental justice. erefore, pallet and other supply chain contributors who have a serious history of OSHA, EPA, EEOC or DOT violations could find themselves on the sidelines when bidding for work with companies that have direct SEC reporting responsibilities for ESG disclosures. Supply chain ESG currently has a hidden footprint but that will change under the SEC rule. At a high level, this concept means accounting for the entire www.safety-law.com The idea is that if publicly traded companies profess to be ESG-friendly to their shareholders in annual reports, in prospectus documents to potential investors and securities advisers, and in documents filed with the SEC, it should be true!