🌎 Out of Scope but front of mind for the SEC #188

SEC passes watered down emissions reporting rules


Happy Monday! 

And the climate Oscar goes to… Barbie, for providing us with limitless Kenergy. 

Last week, the SEC approved their long-awaited climate reporting requirements. TL;DR “material” scope 1 and 2 are, well, in scope but scope 3 got the chopping block. The new rules are a watered down version of what was initially proposed two years ago, crucially omitting Scope 3 emissions and placing a materiality qualifier on obligations. Consider this an important first, a base to build further disclosure mandates off of, and a harbinger of the increasing politicization of investing and climate. 

In other news, Biden vows to save the planet in his surprisingly inspiring State of the Union, while over the pond the UK chancellor keeps mum on climate in his new budget, and Tesla’s firestorm this week is a literal arson at its German gigafactory.

In deals there’s $283m for electrolyzers across two deals, $16m for energy efficient processors, and $11m for DAC. 

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It’s a Scope 1, 2 material world

Last Wednesday, the SEC voted to approve the requirement for public companies to disclose material scope 1 and 2 information, though notably omitting scope 3 disclosures. While this first official US-wide climate disclosure mandate is objectively a big deal, expectations are everything - and the final version is notably considerably scaled back and watered-down compared to the initial proposal set almost two years ago

...we are not mandating Scopes 1 and/or 2 emissions disclosures from all registrants. Rather, under the final rule, if either or both of those categories of GHG emissions are material, and the registrant is an LAF or an AF other than an SRC or EGC, it must disclose its Scopes 1 and/or 2 emissions metrics.”

The breakdown

There are three key takeaways from the final rule:

  • Materiality takes precedent. Large public companies will only be required to disclose climate-related risks that are deemed to have a “material” impact – aka information that an investor would want to know when making an investment decision. However, it’s not clear how materiality will be interpreted, leaving room for ambiguity on disclosing climate-related risks under the disguise of immateriality.  
  • Scope 3 omission. The final version of the rule has dropped the need to report Scope 3 emissions, proving weaker than other legislation and standards such as the IFRS S1 & S2 and the EU’s CSRD / ESRS. Instead, the focus is on disclosing Scope 1 and Scope 2 emissions which will be mandatory for larger public companies. And even these have phased timelines so expect there to be wiggle room in reporting. 
  • Physical risk disclosure. Companies will be required to disclose capitalized costs, expenditures expensed, charges, and losses incurred from severe weather events and physical climate risks. This inclusion is deemed to improve transparency of physical risk reporting as well as boost markets such as climate insurance. 

A global alphabet soup for climate reporting 

Comparison of climate reporting disclosures (Source: David Carlin)

But the SEC ruling isn’t the only climate reporting rule in town. California and the EU have already put forth more stringent climate disclosure laws, requiring companies operating in either geography to comply and report on Scope 3 emissions. This means major global companies are already gearing up for more rigorous reporting. Different international reporting requirements also further buoys the materiality argument; if a company complies with one regulation, it’s harder to claim that those disclosures aren’t “material” under the SEC’s guidelines. 

The implications 

The SEC rule will come into effect 60 days after publication in the Federal Register,  giving companies time to digest the nearly 900-page long list of final rules. It’s estimated that it will apply to 2,800 US companies and about 600 non-US companies. Today, less than half disclose their Scope 1 and 2 emissions, which leaves the rest racing to pick up their climate calculators.

  • Climate disclosure as fiduciary duty. Reflecting Larry Fink’s statement “climate risk is investment risk”, the SEC’s ruling addresses growing investor demand for disclosing and pricing-in climate-related risks. Now, climate data is required to be included in financial reports, not just sustainability ones – which means climate disclosure is getting a more serious look-over, with auditors and CFOs held accountable.
  • The climate reporting value chain opportunity. Rigorous climate reporting creates a new opportunity across the value chain of accountants and auditors. Think the big four (Deloitte, EY, KPMG, PwC) helping companies assess materiality and audit their climate-related disclosures, and software companies (e.g. Watershed,  Jupiter Intelligence, CarbonChain, SustainCERT) streamlining the tracking of emissions and climate risk data. As companies navigate the new global patchwork of climate reporting standards, carbon accounting and compliance platforms with full coverage over all rules are most likely to have an upper hand.
  • A regulatory framework is the start. Regulating the new requirements will increase the SEC’s expertise and capacity, meaning they’ll be able to do more in future. The new data sets will enable benchmarking and the establishment of best practices. Meanwhile regulated businesses will improve their data systems and upskill employees. Over time the capacity of the system to support greater reporting and other kinds of regulatory intervention will increase. Over time regulatory requirements are likely to only move in one direction. 

Thank you to Matt Fisher from Watershed and Megan Pilsbury from Dunya Analytics for taking us through the final set of rules. 

Deals of the Week (3/4-3/10)

Late-Stage / Growth

Sunfire, a Dresden, Germany-based industrial electrolyzers developer for hydrogen production, raised $235m in Growth funding from Ahren Innovation Capital, Amazon Climate Pledge Fund, Blue Earth Capital, Carbon Direct, Carbon Equity, and other investors, as well as  $109m in Debt funding from the European Investment Bank.

🥩 MALK Organics, an Austin, TX-based plant-based milk developer, raised an undisclosed amount in Growth funding from Benvolio Group and Rotor Capital.


Efficient Computer, a Pittsburgh, PA-based energy-efficient processor developer, raised $16m in Seed funding from Eclipse Ventures.

💨 Greenlyte Carbon Technologies, a Dedham, UK-based low temperature Direct Air Capture (DAC) technology platform, raised $11m in Seed funding from Carbon Removal Partners, Earlybird Venture Capital, and Green Generation Fund.

🍎 Bene Bono, a Paris, France-based D2C food waste platform, raised $11m in Series A funding from 2050, Axa Venture Partners, Project A Ventures, and Stride Ventures.

HData, a Birmingham, AL-based energy regulatory data analysis platform, raised $10m in Series A funding from Buoyant Ventures, Firebrand Ventures, Hyde Park Venture Partners, and Victorum Capital.

♻️ Glacier, a San Francisco, CA-based recycling robotics platform, raised $8m in Seed funding from AlleyCorp, Amazon Climate Pledge Fund, NEA, Overture VC, and VSC Ventures.

🏠 Conservation Labs, a Pittsburgh, Pennsylvania-based smart water monitoring technology company, raised $8m in Series A funding from RET Ventures and SustainVC.

🥩 Food Brewer, a Horgen, Switzerland-based cell culture-based food platform, raised $6m in Seed funding from Max Felchlin AG and Zürcher Kantonalbank.

Nextron Energia, a São Paulo, Brazil-based energy-as-a-service platform, raised $5m in Series A funding from Copel Ventures and Vox Capital.

📦 Sway, a Berkeley, CA-based seaweed based packaging developer, raised $5m in Seed funding from Third Nature Investments, Alante Capital, BAM Ventures, Superorganism, and The Helm.

🥩 Cultivated Biosciences, a Wädenswil, Switzerland-based yeast-based dairy alternative developer, raised $5m in Seed funding from Founderful, HackCapital, Joyful VC, Mandi Ventures, Navus Ventures, and other investors.

🔋 phelas, a Munich, Germany-based Liquid Air Energy Storage (LAES) systems technology developer, raised $4m in Seed funding from Axon Partners Group, BNV Partners, Deutsche Telekom hub:raum Fund, and E44 Ventures.

Gridcog, a London, UK-based power grid asset management platform, raised $4m in Seed funding from AlbionVC.

🥩 Umaro Foods, a Berkeley, CA-based seaweed-based protein developer, raised $4m in Seed funding from AgFunder, Alexandria Ventures Investments, Climate Capital Bio, and Ponderosa Ventures.

📦 eComID, a Stockholm, Sweden-based AI-powered retail returns reduction platform, raised $3m in Pre-Seed funding from CapitalT, Anaheta Berenberg-Consbruch, and H&M Group Ventures.

💨 Thryve, a Singapore City, Singapore-based carbon project development platform, raised $3m in Seed funding from Capital Code and Openspace.

🥩 PawCo Foods, a San Francisco, CA-based plant-based dog food platform, raised $2m in Seed funding from Elevate Ventures.


Electric Hydrogen, a Natick, MA-based green hydrogen and electrolyzer manufacturer, raised $50m in Equipment financing from Trinity Capital.  

Stormfisher, a Toronto, Canada-based hydrogen-based fuel production platform, raised $30m in funding from ARC Financial.

DevEngine, a New York City, NY-based clean energy project development platform, raised $20m from Spring Lane Capital.

Mufin Green, a New Delhi, India-based climate financing solutions platform, raised $5m in Debt funding from BlueOrchard Finance.

New Funds

EQT, a Stockholm, Sweden-based investment firm, held a final close of its $3.3bn future fund that invests across climate and health. 

Cibus Capital, a London-based investment firm, held a final close of its $510m private equity fund and its $135m venture fund that both invest in agriculture and food companies. 

Can’t get enough deals? See full listings and deal analytics on Sightline Climate

In the News

President Biden vowed to “Save the Planet From the Climate Crisis” in his State of the Union address. Throughout his speech Biden emphasized the economic benefits and job gains that come from tackling climate change, and boasted his record on the topic through the Inflation Reduction Act. He proposed tripling the American Climate Corps over the next decade, a landmark jobs program for clean energy related projects. Meanwhile a report by Carbon Brief predicts that if Donald Trump were to win, US emissions would be 4bn tonnes greater by 2030.  


In the UK, climate was entirely absent from the new budget. The budget continued a freeze on fuel duty, and, while it included a one year extension on the windfall tax for oil and gas companies, provided no new funds for EVs or other climate technologies. The UK also announced a $1.3bn auction for clean energy projects which will be the sixth of its kind. The auction in 2023 failed to attract any bidders as the guaranteed price offers were too low for developers. 

Tesla claims a recent arson attack could result in $1bn in damages. The “Volcano Group”, described by Musk as “eco-terrorists” set fire to a power mast, severing electricity to the factory and the local town and causing the factory to cease its usual production of around 1,000 vehicles a day. 

MethaneSAT, a methane-tracking satellite, was launched this week and will be operated by a subsidiary of the Environmental Defense Fund. The satellite will be providing data to companies, regulators and ordinary citizens free of charge. The recent influx of methane imaging satellites over the last year is helping to improve coverage, boosting accessibility and accuracy. For more on the topic check out our recent headline.  

Europe's largest pension fund, Netherland-based ABP, implemented stricter ESG guidelines targeting €30bn investments, accounting for longer-term climate and biodiversity risk. After divesting €15bn from fossil fuels in 2021, ABP now anticipates cutting its portfolio company investments roughly by half as a result of this monumental shift. 

Meanwhile, JP Morgan agreed to disclose its “clean energy supply financing ratio”; following pressure from NYC public pension funds. The ratio indicates the total financing in low-carbon energy relative to that in fossil-fuel energy.


Basel III Endgame makes concerned allies of banks and clean energy  

California man caught green-handed smuggling greenhouse gasses 

Goldman predicts 40% decline in battery prices from 2023 to 2025

Renewable Rikers? Could NYC’s infamous prison island see a sunny future?

Wyoming's gets ren-ewe-able 

Bitcoin goes nuclear

Salmon farms struggle against the current of mass die-offs 

How China eclipsed its competitors in solar while in the US the industry could be headed for consolidation 

Climate change extinction study spotlights most at-risk animals

Rivian takes it up a gear with new R2 and R3 SUVs 

Opportunities & Events

📅 Battery Summit: Register for the International Battery Summit on March 12-15th for an opportunity to gain exposure to state of the art energy storage technology for consumer, automotive, military, grid, and industrial applications.

📅 Hello Tomorrow Summit: Register for the 2024 Hello Tomorrow Global Summit on March 21-22nd in Paris for engaging discussions, networking, and business opportunities with over 80 deep tech startups and industry leaders. Sophie will be there!

📅 Out in Climate Happy Hour: Register to join the next Our in Climate Happy Hour for the Bay Area’s first event of the year on March 23rd to meet and network with other LGBTQ+ professionals in sustainability.

📅 Climate Career Panel: Register to attend the Launching Your Climate Career Panel hosted by Young Professionals in Energy Boston in collaboration with College to Climate on March 25th for a discussion on early climate career experiences.

📅 Female Founders & Funders Happy Hour: RSVP to join Sophie for conversations and libations with a few hundred women working in climate on April 24th during SF Climate Week. 

💡 Greenhouse Accelerator: Apply for Imperial College London’s Undaunted Greenhouse Accelerator by April 25th for an opportunity to join the 7th cohort of breakthrough UK-based climate tech startups with potential for significant climate impact and commercial growth.


Communications Manager @Carbon Business Council

Community Engagement Lead, Controller, VP Project Development @Planetary Technologies

Program Manager @Evergreen Climate Innovations

Principal Venture Scientist @Marble

Associate Program @Collab Fund 

Business Development and Marketing Associate; Head of Operations/COO @Earthbond

Postdoc Green Growth Researcher @Harvard Growth Lab

Nonprofit Chief Financial and Admin Officer @Greentown Labs

Associate - Industrial Decarbonization; Chief of Staff, Investment Ops @LowerCarbon Capital

Summer Associate - Natural Climate Solutions @Just Climate

📩 Feel free to send us deals, announcements, or anything else at [email protected]. Have a great week ahead! 

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