As drought continued to grip huge stretches of American farmland last week, decimating some crops and forcing farmers to plow under others or sell off livestock, a small, but critically related bureaucratic step advanced in Washington. 

Over the past year the Securities and Exchange Commission, the country’s top financial regulator, has proposed rules that would help investors get better, more transparent information about companies’ “green” investing claims and would push large, publicly traded companies to reveal the impacts of climate change on their businesses. Last week, the SEC received the last comments from the public on one of these proposed rules. 

Advocates for these changes say they’re crucial for investors and for the country’s future financial health, and argue that the SEC’s mandate demands that it require companies to reveal their exposure to climate risks. These long-awaited rules have been largely welcomed by green investing groups and even by giant financial institutions and asset managers, including the world’s largest, BlackRock.

“These are fundamental rules for the SEC,” said Andrew Behar, the chief executive officer of As You Sow, a shareholder advocacy group. “This is the most basic reason for the SEC to exist.”

The oil and gas industry does not agree, nor do the industry’s most reliable allies: agribusinesses and the powerful lobbying groups that represent them, including the American Farm Bureau Federation.

The Farm Bureau did not reply to requests for comment.

They argue that the SEC is reaching beyond its purview, and have filed voluminous comments, citing an array of technical and regulatory qualms. But agribusiness has an especially heightened interest in the issue and has deployed its influence to try to stymie the SEC’s efforts.  

One of the SEC’s proposed rules would require large, publicly traded companies to report the greenhouse gasses they emit directly from their operations, from the energy they purchase and from their supply chains. These supply chain emissions, known as Scope 3 emissions, comprise the bulk of greenhouse gases that agribusinesses emit—about 90 percent. And, while hundreds of businesses of all kinds already disclose their emissions to the SEC and via other disclosure platforms, food and agribusiness companies have been slow to do that. Of the 50 largest food and beverage companies, only 16 percent report their Scope 3 emissions, according to one analysis.

Soon after the SEC issued these proposed disclosure rules in March, the agribusiness lobby and its allies in Congress kicked into gear. In early April, Sen. John Thune of South Dakota and 10 fellow Republicans sent a letter to President Joe Biden, saying that the rules would limit farmers’ access to credit.

“Actions taken by some in your administration, accompanied by activists’ broader narrative on environmental issues, are undoubtedly already leading to reduced lending to certain sectors, such as fossil fuels. We are concerned that this push may eventually directly or indirectly discourage banks and credit unions from lending  to farmers, ranchers, and other agribusinesses,” Thune and his colleagues wrote.

In May lobbyists for the American Farm Bureau Federation and powerful commodity groups, the National Pork Producers Council and the National Cattlemen’s Beef Association, met with SEC officials. The next day the Farm Bureau published a post on its website, saying the disclosure rule would put farmers out of business because it would require them to provide burdensome data about their emissions. The agricultural sector is responsible for about 11 percent of total annual U.S. greenhouse gas emissions, which currently are 4.71 billion tons.

In the following weeks, more than two dozen state Farm Bureaus submitted comments to the SEC, asking it to withdraw the rule or to withdraw the Scope 3 requirement.  

“There has been no consideration about the expense and burden the proposed rules would have on small and mid-sized agricultural operations,” wrote the president of the Oklahoma Farm Bureau. “Additional regulations, and especially those that have no benefit to producers, are particularly onerous for small and midsized operations and can harm rural communities.”

The other submissions from Farm Bureau members made similar comments, suggesting coordination between the states or the national leadership.

The flaw here, green investing advocates point out, is that the rule doesn’t require farms to report anything—the rule applies to publicly traded companies only, although they would have to estimate the Scope 3 emissions of their suppliers, which include farms. The advocates contend powerful agribusiness interests are misleading farmers and attempting to harness their political influence toward derailing efforts by the SEC to acknowledge that climate change poses major risks to the American financial system and to investors.

“It’s hard for me to understand how they’d look at this rule as an existential threat, not climate change as an existential threat,” said Steve Suppan, a senior policy analyst at the Institute for Agriculture and Trade Policy, a left-leaning agricultural advocacy group.

The rule, supporters point out, is an attempt to standardize companies’ disclosures so that investors can assess comparable information about whether a company is facing significant climate risk and adequately addressing those risks, or whether a company is reducing emissions, as many have pledged to do.

“It’s acknowledging that climate change is a material risk for every company, so the disclosure should be accurate. That’s fundamentally what it is,” Behar said, referring to the disclosure rule. “Right now the emissions disclosures are all over the place. As an investor you have no idea how to even find them or compare them.”

In May the SEC issued a related rule aimed at ESG investing—environmental, social and governance—in which investors put their money into funds that align with certain goals, including emissions reductions. ESG investing has skyrocketed in recent years, but researchers and analysts have determined that many ESG funds are invested in highly polluting industries and companies.

For example, six out of 20 of the biggest ESG funds invest in Exxon, the world’s largest oil company and a major greenhouse gas emitter. Many invest in agriculture and food companies that are tied to deforestation, while many of the world’s major banks continue to bankroll agricultural businesses responsible for cutting down critically important rainforests. 

The new rules will attempt to define what can be called an “ESG” fund so that investors have a clear picture of where to put their money.

Farm interests, again, used the same message to push back against the rules, saying they would hurt small farmers. “Imposing additional reporting requirements around climate-related metrics would distract farms of all sizes from their focus on producing food, fiber and fuel,” wrote Steven Troxler, the commissioner of the North Carolina Department of Agriculture and Consumer Services, in comments submitted to the SEC.

These reporting requirements, however, will only be placed on large companies—not smaller companies in the supply chain, Suppan notes. These large companies will be allowed to use accepted methodologies, including those from the Environmental Protection Agency, to estimate emissions from their suppliers, meaning farmers will have no reporting burden.

“It requires the Smithfield’s and the ADM’s and JBS’s of the world to report their emissions and to do so in the context of financial risk reporting,” Suppan said. “You have investors with tens of trillions in assets under management who are looking at these companies, and they have all manner of sustainability claims, yet no data to back them up.”

“There are no farms in the U.S. listed with the SEC,” Suppan added. “This applies to listed companies, and they’re using farmers as fronts.”

Last week, the Farm Bureau, which had long pushed against climate legislation until recently, released a survey saying that three-quarters of American farmers report that they’re suffering from severe drought and losing millions in income.