The U.S. Securities and Exchange Commission (SEC) has dropped a requirement for U.S.-listed companies to disclose so-called Scope 3 emissions in order to meet corporate climate risk rules it is preparing to adopt, people familiar with the matter said on February 22, according to Reuters.

Disclosure of Scope 3 emissions was included in the SEC’s original draft of the rules published in March 2022, the sources said.

Scope 3 emissions account for greenhouse gases, such as carbon dioxide, released in the atmosphere from a company's supply chain and the consumption of its products by customers. For most businesses, Scope 3 emissions represent more than 70% of their carbon footprint, according to consulting firm Deloitte.

If adopted, the new draft would represent a win for many corporations and their trade groups that lobbied to water down the rules. But it would also deviate from European Union rules which make Scope 3 disclosures mandatory for large companies starting this year and potentially complicate compliance for some global corporations.

Reuters said scaling back the rules would be a blow for President Joe Biden's agenda to address climate change threats through federal agencies. Biden, a Democrat, has been under pressure from many lawmakers in his party to do more and move at a faster pace.