Monday, May 27, 2024

California to require big firms to reveal carbon emissions in first law of its kind

A groundbreaking California law will force large companies doing business in the state – including major global corporations – to disclose their planet-heating carbon emissions.

The measure, signed into law by the governor, Gavin Newsom, on Saturday, will be the nation’s first of its kind, serving as a blueprint for national climate accountability.

It comes as federal regulators have dragged their feet on crafting similar rules, which could be finalized this month.

SB 253 will require California regulators to create rules by 2025 for public and private companies whose annual revenues exceed $1bn. That affects about 5,300 corporations, including Chevron, Wells Fargo, Amazon and Apple.

By 2026, those companies will have to publicly disclose how much carbon is produced by their operations and electricity use. Critically, by 2027, they will also be required to report emissions generated by their supply chains and customers, known as “scope 3” emissions, which are highly controversial among business interests, including the fossil fuel industry.

A companion bill passed by the state’s legislature, SB-261, would additionally require businesses with more than $500m in yearly revenue to disclose their climate-related financial risks beginning in 2026, or face annual penalties.

Both bills will make new data public beyond California’s borders, which supporters say could be game-changing.

“The disclosure requirements would really pull back the curtain on the biggest climate destroyers in the oil industry and make it harder to greenwash,” said Hollin Kretzmann, a senior attorney at the environmental advocacy group Center for Biological Diversity, which supported the bills.

Yet Newsom’s signatures came with caveats. In two similar signing statements, he raised concerns about the bills’ implementation deadlines and the costs they will impose on businesses. He previously said approval would be subject to “some cleanup” in language, sparking concern that the laws will be weakened.

“I thank the governor and the bill authors for their leadership, but the hard work of implementing these laws must prove our shared commitment to California’s climate leadership,” said David Weiskopf, senior policy advisor at advocacy group NextGen.

The measures come as the Securities and Exchange Commission (SEC) finalizes a long-awaited, similar federal mandate. Last year, the agency proposed regulations that would likewise require publicly traded companies to notify investors of their emissions – including scope 3 emissions – and climate-related risks.