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The long-delayed risk disclosure regulation is almost here.
A new era of transparency for corporate sustainability is coming — finally. After two years of deliberation, the Securities and Exchange Commission is expected to issue a final rule requiring public companies to make climate-related disclosures to investors. The decision could come as soon as next week.
The rule considers two categories of climate-related information relevant to investors: greenhouse gas emissions and exposure to climate-related risks like extreme weather or future regulations. While many companies voluntarily disclose this kind of information in other ways, the rules will both require and standardize climate-based reporting as a core part of a company’s fiduciary duty.
From almost the moment it appeared, the proposal has been the center of a lobbying firestorm. Some of the rule’s opponents write it off as part of an activist agenda — an indirect route to economy-wide carbon regulations. “The host of new requirements in this Proposed Rule are motivated by a small number of environmental activists who seek to steer the economy away from fossil fuels,” wrote twelve Republican attorneys general in a letter to the SEC responding to the proposal. The U.S. Chamber of Commerce, meanwhile, vowed to fight back against “unlawful and excessive government overreach.” (At a Chamber-sponsored event last October, SEC Chair Gary Gensler joked, “Wait, are you already suing us? I just walked in.”)
Certainly there are environmentalists who do see the rule as a tool to undermine the oil and gas industry. But proponents primarily make the case that the stakes are less about the atmosphere and more about protecting investors and the entirety of the financial system.
While we’re still waiting on the final rule — which was originally expected in the fall of 2022 and has been repeatedly delayed — here’s a catch-up on what we know so far.
At a basic level, the SEC makes rules saying what companies have to disclose and how so that investors can make well-informed decisions. The two types of information this particular rule covers — climate-related risks and greenhouse gas emissions — are distinct, but related.
The former is pretty straightforward. From the growing number of billion-dollar weather- and climate-related disasters in the United States to the ongoing exodus of insurance companies from fire and flood-prone areas to trade delays in the drought-stricken Panama Canal, it’s clear that climate change poses a substantial financial risk to businesses. It makes sense that investors would want to know how exposed a company’s warehouses or data centers or trucking routes are to wildfires and floods.
But why should investors care about a company’s emissions? Because they are an indicator of another type of risk.
“A shareholder is not necessarily concerned with whether a company is ‘on target’ with any climate commitment,” Boston University law professor Madison Condon writes, “but rather in assessing how exposed an asset may be to changes in global or local climate policy, energy prices, or shifts in consumer and investor sentiments.”
These changes are already in motion around the world, and are generally accelerating. Companies that aren’t preparing could be disadvantaged, or alternatively, could miss lucrative opportunities. Steven Rothstein, a managing director at the nonprofit Ceres, gave the example of the steel industry. If you think that, in the next several years, customers are going to ask for low-emission steel — which some already are doing — or that there might be a regulatory cost put on steel-related emissions, then a company with lower emissions will be better positioned to grow, while a company with higher emissions might have to spend a bunch of money to retrofit its factories.
Part of the SEC’s rationale for the rule is the proliferation of investor-led initiatives calling for government-mandated climate risk disclosure. “These initiatives demonstrate that investors are using information about climate risks now as part of their investment selection process and are seeking more informative disclosures about those risks,” the Commission wrote in its proposal. (Oil giant Exxon filed suit against the sponsors of one such proposal in January, having lost patience with proposals it said were “calculated to diminish the company’s existing business.”)
After the draft rule was released in March 2022, the SEC was bombarded by thousands of comments from investors, academics, NGOs, politicians, trade associations, and companies. One analysis of those comments by legal researchers found that investors were the most supportive group, with more than 80% in favor of the rule.
The most contentious aspect of the proposal invited criticism even from parties that were generally supportive of the rule. The SEC had taken a strong stance on emissions reporting, asking companies to disclose emissions indirectly related to their business, known as“scope 3” emissions. That means a company like Amazon wouldn’t just have to report the emissions from its warehouses and delivery trucks, but also an estimate of the emissions associated with producing and using all the products it sells. A company like Ford wouldn’t just have to report the emissions from its factories, but also from the production of the raw materials it uses, as well as from all the gasoline burned in the cars it sells.
Those in support of scope 3 reporting point to the fact that for many companies, including the two I just named, the number would vastly exceed their direct emissions.
In a legal review of why scope 3 emissions reporting matters, Condon warned that without it, companies could begin outsourcing their most emissions-intensive processes to third parties in order to appear greener than they actually are. She also argued that leaving out scope 3 obscures climate risks. She gave the example of electric vehicles, which can involve higher emissions during production than conventional cars but result in much lower emissions over their lifecycle. “When excluding Scope 3, an EV manufacturer is penalized, even though from the perspective of considering transition risk and climate impact, this makes little sense,” she wrote.
But companies and their trade associations threw every excuse at the idea of a scope 3 requirement: It would cost too much to gather the data; the data on supply chain emissions is unreliable and impossible to verify; since companies don’t directly produce these emissions, they aren’t relevant; etc.
And by all accounts, they won. The SEC is expected to drop requirements to report scope 3 emissions in the final rule.
However, that’s unlikely to satisfy opponents, many of whom, like the Republican attorneys generals who wrote letters to the Commission, say the SEC doesn’t have the legal authority to require climate-related disclosures at all. If there’s one thing that critics and supporters agree on, it’s that the rule, whatever it says, is going to be challenged in court.
A lot of companies are going to have to report their scope 3 emissions anyway. The European Union’s Corporate Sustainability Reporting Directive includes scope 3 and is expected to cover more than 50,000 companies, with some starting to report as soon as this year; U.S.-based businesses on EU-regulated exchanges, or with subsidiaries or parent companies in Europe, will be expected to comply. A similar rule voted into law in California last year also requires scope 3 emissions disclosures and covers any company doing business in the state — whether private or public — giving it broader reach than the SEC. However, Governor Gavin Newsom did not include any funding for the law in his budget proposal this year, creating concern that it will be delayed.
Danny Cullenward, a climate economist and legal expert, said the fate of the California regulations are important in light of the likely Supreme Court challenge to the SEC rule. “It's a lot harder to mount comparably broad challenges to state laws on this front,” he told me.
Despite the SEC’s narrow focus on protecting investors, the mandatory disclosure of corporate emissions and climate risks would have widespread effects — even some that regular people might feel. Suddenly, consumers would have better tools to compare the relative sustainability of different companies and products. Activists would have more documentation to hold companies accountable for greenwashing or failing to live up to their public climate commitments.
The rule is also set to spark an explosion in the businesses of corporate emissions accounting and climate risk analysis. Most companies don’t have the staff or expertise to track their emissions, and thus will have to turn either to specialized climate-specific firms like Watershed or all-purpose corporate accountants like Deloitte to manage the disclosure process for them. Similarly, analytics giants like Moodys and S&P Global will also be called upon to feed company data into climate models and spit out risk reports.
Both exercises come with inherent challenges and uncertainties. Climate risk researchers have warned that rating services keep their methodologies in a black box, making it hard to know whether they are using climate models appropriately. “The misuse of climate models risks a range of issues, including maladaptation and heightened vulnerability of business to climate change, an overconfidence in assessments of risk, material misstatement of risk in financial reports, and the creation of greenwash,” wrote the authors of a 2021 article in the journal Nature Climate Change.
“When you ask, ‘What is my exposure to future climate risks?,’ you're asking for a projection of future climate states and probabilities of different future climate outcomes and extreme weather events. There's an enormous amount of scientific uncertainty and complexity in getting to that,” Cullenward told me.
But while neither emissions accounting nor climate risk assessment may be perfectly up to the task yet, Cullenward argued that’s all the more reason for the SEC to get these rules in place.
“If you don't ask people to disclose what's going on, it's just sticking your head in the sand,” he said. “No one will ever know how to do it perfectly, getting out of the gate. To me that is not a reason to stop or to slow down, that is a reason to get started.”
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Whichever way you cut it, this has been an absolute banner year for nuclear deals in the U.S. It doesn’t much matter the metric — the amount of venture funding flowing to nuclear startups, the number of announcements regarding planned reactor restarts and upgrades, gigawatts of new construction added to the pipeline — it’s basically all peaking. Stock prices are up across all major publicly traded nuclear companies this year, in some cases by over 100%.
“This year is by far the biggest year in terms of nuclear deals that has occurred, probably, since the 70s,” Adam Stein, the director of nuclear innovation at The Breakthrough Institute, told me. “It’s spanning the gamut from bringing a 40-year-old reactor back to things that have not even been proven scientifically yet.”
To name just a few announcements from this year: planning for a 4.4-gigawatt nuclear power complex is now underway in Texas; South Carolina’s state-owned utility is seeking buyers to restart construction on two partially built AP1000 reactors; New York governor Kathy Hochul is looking to build a new reactor in upstate New York; The Tennessee Valley Authority submitted a construction permit for a small modular reactor; Google signed a power purchase agreement with Commonwealth Fusion Systems; and another fusion company, Helion Energy, raised a whopping $425 million round of venture capital. On top of all that there’s the Palisades nuclear power plant in Michigan, which is targeted to restart by year’s end, bringing 800 megawatts of new nuclear power online.
Heading into the second Trump term, there were plenty of indications that the administration would support this technology with increasingly bipartisan appeal. So it wasn’t exactly a surprise that while the One Big Beautiful Bill eviscerated tax credits for solar and wind, it preserved them for both existing and new nuclear facilities. Now that this support is assured, Stein expects the nuclear announcements to keep rolling in. “We might have seen more deals earlier this year if there wasn’t uncertainty about what was going to happen with tax credits. But now that that’s resolved, I expect to hear more later this year,” he told me.
How much of this is, I asked him, is due to data centers and their seemingly insatiable demand for clean, firm power? “Most of it,” he said simply. By way of example, he pointed out how data center load growth has changed the outlooks for two small modular reactor companies in particular. “NuScale has been trying to find their first project for a long time now, after they had to cancel their [Utah Associated Municipal Power Systems] project. Kairos didn’t have a clear buyer for its first-of-a-kind, even though it was building two test reactors,” Stein explained. “Then all of a sudden, they all had additional deals in the works because of data center demand.”
Last year, Kairos inked a 500-megawatt deal with Google to meet the hyperscaler’s growing data center needs, while this year, Texas A&M selected the company — along with three others — to build a reactor at the university’s research and development campus. And while NuScale infamously canceled its first project in 2023 due to rising costs, this year it received approval from the Nuclear Regulatory Commission for a new and improved reactor design. Now the company’s CEO, John Hopkins, told Reuters that NuScale is in talks to deploy its tech with five unnamed “tier one hyperscalers.” Its stock is up more than 150% on the year.
That’s a big turnaround for a company that, less than two years ago, was widely considered a cautionary tale — and it’s not the only one in the industry with this type of comeback story. Right before NuScale’s project failed, another nuclear company, X-energy, announced that it would no longer go public due to “challenging market conditions” and “peer company trading performance.” But while X-energy still has yet to IPO, it appears to be doing just fine. In February, the company announced the close of a $700 million Series C follow-on round, coming on the heels of Amazon’s strategic investment last year.
“I think every company has their stories about how things are changing,” Seth Grae, CEO of the advanced nuclear fuel company Lightbridge, told me. Things have moved a lot faster, Grae said, since Trump released a series of executive orders aimed at accelerating nuclear energy deployment. “Just since May, we’ve received this highly enriched uranium [from the Department of Energy], made these fuel samples, got them qualified already at Idaho National Lab. We expect they’ll be in the reactor this year. Grae told me. “Things didn’t used to happen that fast in nuclear.”
Trump’s plans to fast track nuclear development have also raised serious concerns, however, as critics worry that acceleration could lead to laxer safety standards The executive orders call for, among other things, cutting staff at the Nuclear Regulatory Commission, just as the industry enters a period of intense activity. In June, the President fired one of the agency’s commissioners, Christopher Hanson, without cause. Another commissioner, Annie Caputo, resigned in July.
But right now, the nuclear industry is mostly basking in optimism. Grae credits the government’s strong support for the surge in nuclear stocks — Lightbridge’s own stock price has jumped 180% this year, while another nuclear fuel company, Centrus Energy, is up even more. The small modular reactor company Oklo is up 285% for the year, on the heels of last year’s 12-gigawatt non-binding deal with the data center company Switch — one of the largest corporate clean power agreements to date.
Last year’s slew of deals involving Oklo, X-energy, and Kairos show that the sector’s momentum had been building well before Trump took office. By 2023, the writing was already on the wall in terms of data center load growth, as grid planners began to predict a sharp rise in electricity demand after over a decade of stagnation. But when I asked Erik Funkhauser of the Good Energy Collective whether the prior two years compared with this one, he concurred with Stein. “Nope,” he told me. “We’re seeing capital infusion at a really, really high pace, as high of a pace as the company’s suppliers can keep up with on projects.”
Still, the party may not go on forever. “I see a potential for a Valley of Death,” Stein told me, similar to what many startups go through when they’re trying to raise later-stage funding rounds.
“If things don’t start to actually move forward with real progress, either getting licenses or building prototypes on time, then all of that investment will be pulled back.” That’s what the U.S. saw during the last so-called “nuclear renaissance” in the late 2000s, he explained, when a rash of large reactors were proposed with only two actually reaching completion.
These were the notorious Vogtle reactors 3 and 4 in Georgia, which finally came online in 2023 and 2024 respectively, running billions over budget and years behind schedule. In order for this latest round of nuclear enthusiasm to avoid the same fate, Stein told me it’s critical that leading projects demonstrate enough early success to maintain developer confidence in the economic and technical viability of new — and old — nuclear technologies.
That being said, the sector will inevitably contract. “Back when we saw this last scale-up, there were three designs that were really competing for attention, and now there are 75. So we’re going to see a lot of failures,” Stein said. The question for venture investors, he told me, is “how many failures of startups that you didn’t invest in are you willing to tolerate before you start to think the whole segment has trouble?”
The second main way this could all fall to pieces, he told me, is if “somebody tries to move too fast,” and that recklessness leads to “either a bankruptcy or an accident or something like that that will send ripples or shock waves through the whole sector.”
Indeed, a metaphorical or literal meltdown in the sector could put a quick halt to this year’s frenzied momentum. But within the next few years, as these announced projects begin to line up their licenses and come online — or fall apart— we’ll soon see whether this latest nuclear revival is a true turning point or just another bubble.
On the Senate’s climate whip, green cement deals, and a U.S. uranium revival.
Current conditions: Flash flooding strikes the Southeastern U.S. • Monsoon rains unleash landslides in southern China • A heat dome is bringing temperatures of up to 107 degrees Fahrenheit to France, Italy, and the Balkans.
An August 5 chart showing last month's record electricity demand peaks.EIA
The United States’ demand for electricity broke records twice last month. Air conditioners cranking on hot days, combined with surging demand from data centers, pushed the peak in the Lower 48 states to a high of 758,053 megawatts on July 28, between 6 p.m. and 7 p.m. EST, data from the U.S. Energy Information Administration’s Hourly Electric Grid Monitor shows. The following day, peak demand set another record, hitting 759,180 megawatts. That’s nearly 2% above the previous record set on July 15, 2024.
The EIA predicted demand to grow by more than 2% per year between 2025 and 2026. Forecasts are even higher in areas with large data centers and factories underway, such as Texas and northern Virginia. The milestone comes as the Trump administration cracks down on solar and wind energy, two of the fastest-growing and quicker-to-build sources of new generation. On Tuesday, The New York Times reported that the Environmental Protection Agency is moving to eliminate $7 billion in spending on grants for solar energy, though when Heatmap’s Emily Pontecorvo asked the agency, it said only that, “With the passage of the One Big Beautiful Bill, EPA is working to ensure Congressional intent is fully implemented in accordance with the law.”
Senator Brian Schatz, a Democrat from Hawaii, locked down enough votes on Tuesday to replace Illinois Senator Dick Durbin as the Democrats’ whip in the chamber. Durbin, who is retiring next year, has served in the Senate Democrats’ No. 2 position since 2005. In his endorsement on Tuesday, Senate Minority Leader Chuck Schumer of New York called Schatz “a close friend and one of my most valued allies.”
Schatz crusaded for the Inflation Reduction Act and told Heatmap he supported last year’s failed bipartisan permitting reform deal, even as progressive greens campaigned against its giveaways to fossil fuels. In a Shift Key podcast interview with my colleague Robinson Meyer and his co-host, Princeton professor Jesse Jenkins, in February, Schatz pitched a big tent for climate action. “We all have to hang together. It’s the American Clean Power Association. It’s the energy company that does both clean and fossil energy. It’s the transmission and distribution companies. It’s the manufacturers. It’s labor. It’s Wall Street. It’s K Street. Everyone has to hang together and say, not only is this good for business, but there’s something that is foundationally worse for business than any individual policy decision.”
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The Trump administration may be clawing back funding for cleaning up heavy industry, but Big Tech is still inking deals. On Monday, Amazon agreed to buy low-carbon cement from the startup Brimstone. Then on Tuesday, the data center developer STACK Infrastructure announced the completion of “a pilot pour” of green cement from rival startup Sublime. The moves highlight the growing demand for cleaner industrial materials amid increased scrutiny of the energy and pollution linked to server farms.
America’s uranium enrichment went out of business in the early 2000s after the Clinton-era megatons-to-megawatts program essentially ceded the industry to cheap Russian imports made from disassembled atomic weapons. Since banning imports from Russia last year, the U.S. has been ramping up funding for nuclear fuel again, especially as the industry looks to build new types of reactors that rely on fuel other than the low-enriched uranium that virtually all the country’s operating 94 commercial reactors use. On Monday, the Department of Energy announced its first pilot project for advanced nuclear fuels, giving the startup Standard Nuclear the first federal deal. On Tuesday, the agency signed a $1.5 billion deal to restore the so-called Atomic City on the 100-acre parcel of federal land at the former Paducah Gaseous Diffusion Plan in Kentucky.
The Trump administration gave permission to the National Weather Service to hire up to 450 meteorologists, hydrologists, and radar technicians after sweeping cuts from the Department of Government Efficiency, CNN’s Andrew Freedman reported. The agency, which was partly blamed for its warnings going unheeded ahead of the deadly Texas floods last month, also received an exemption from the federal hiring freeze.
The move came the same day as a federal judge blocked the administration from diverting billions of dollars in Federal Emergency Management Agency funding for disaster resilience and flood mitigation. The injunction warned FEMA against spending the money on anything else.
Beyond Meat is finally getting beyond meat. The company plans to shed the flesh reference in its name this week as it launches its new Beyond Ground product that promises more protein than ground beef. “With this launch,” Fast Company’s Clint Rainey reported, “Beyond Meat is becoming merely Beyond and turning its focus away from only mimicking animal proteins to letting plant-based proteins speak for themselves. The radical move is cultural, agricultural, and financial.”
Rob and Jesse talk through the proposed overturning of the EPA’s “endangerment finding” on greenhouse gases with Harvard Law School’s Jody Freeman.
The Trump administration has formally declared that carbon dioxide and other greenhouse gases are not dangerous pollutants. If the president gets his way, then the Environmental Protection Agency may soon surrender any ability to regulate heat-trapping pollution from cars and trucks, power plants, and factories — in ways that a future Democratic president potentially could not reverse.
On this week’s episode of Shift Key, we discuss whether Trump’s EPA gambit will work, the arguments that the administration is using, and what it could mean for the future of U.S. climate and energy policy. We’re joined by Jody Freeman, the Archibald Cox Professor of Law at Harvard and the director of Harvard’s environmental and energy law program. She was an architect of the Obama administration’s landmark deal with automakers to accept carbon dioxide regulations.
Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Robinson Meyer: I just want to make a related question, which is, you can actually say some of the sentences in the DOE report — you can believe tornadoes don’t show any influence from climate change and still believe heatwaves do, and still believe extreme rainfall events do. In fact, you could believe the cost of heat waves getting worse could justify the entire regulatory edifice.
Jody Freeman: What I love about you, Rob, right now, is you’re kind of incensed about little points that might individually sort of be right, maybe each one separately, but none of it adds up to even a chink in the armor. Right? And what’ll have to happen is the scientific community writ large, en masse, is going to have to come back and say, even if one or two or three of these sentences could possibly, plausibly be actually accurate, it does nothing to change the overwhelming —
Jesse Jenkins: It doesn’t matter.
Freeman: Right. What I think is happening is we’re all getting poked and distracted and tweaked into outrage over science, when in fact, the first argument they’re making is the one where they could actually attract some judges and justices to say, Oh wait, maybe you have a little more discretion here to set a threshold level. You know, Maybe it matters that you’re saying nothing we do here in the U.S. will make a difference in the end to global warming, and maybe that is a reason you don’t want to regulate. Hmm, maybe we’ll accept that reason. And that’s what we need, I think, to be more concerned about.
Jenkins: You’re saying, don’t get distracted by the fight over the climate science. That fight is very clear. It’s this legal argument that this isn’t an air pollutant because it’s not a local air pollutant, it mixes globally with all the other CO2, and we can’t, you know, each class of cars is a tiny contributor to that, and so we shouldn’t worry about it —
Freeman: And much of this is a replay, or a rehash of arguments that the George W. Bush administration lost in Massachusetts vs. EPA. So a lot of this is like, let’s take another run at the Supreme Court.
Mentioned:
The EPA Says Carbon Pollution Isn’t Dangerous. What Comes Next?
The EPA on its reconsideration of the endangerment finding
Jody’s story on the change: Trump’s EPA proposes to end the U.S. fight against climate change
Jesse’s upshift (and accompanying video); Rob’s sort of upshift.
This episode of Shift Key is sponsored by …
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Music for Shift Key is by Adam Kromelow.