California’s climate bill requires business carbon emissions data

California lawmakers are renewing efforts to make large corporations responsible for tracking and reporting carbon emissions.

California Senate Bill 253, also known as the Corporate Climate Data Accountability Act, was introduced Tuesday by Sen. Scott Wiener (D-San Francisco) and co-sponsored by eight other Senate Democrats as part of three climate bills aimed at toward California’s climate goals. SB-253 would require corporations with annual revenue of $1 billion or more to report their carbon emissions in Scopes 1, 2 and 3. The bill was first introduced as SB-260 in the 2022 California legislative session, but failed to gain acceptance after encountering backlash regarding the reporting requirement.

Companies are not required to report their carbon emissions classified as Scope 1, 2 and 3. Scope 1 emissions come from sources directly controlled by a company, while Scope 2 emissions are created indirectly through the purchase of electricity, heating and cooling. Scope 3 emissions are emitted by third parties, such as employees commuting or traveling on business, or business partners in a company’s supply chain, making them more difficult to track.

California’s efforts are similar to those of the US Securities and Exchange Commission (SEC), which is working on a climate risk disclosure rule requiring publicly traded companies to provide carbon emissions data. SB-253 goes beyond what the SEC rule requires by making it a requirement for private companies as well.

The bill “closes a critical information gap that exists as a result of the lack of mandatory data collection and reporting requirements for comprehensive reporting of greenhouse gas emissions by the largest corporations that have enormous influence and a great responsibility to be part of the solution, said Melissa Romero, senior legislative manager at the environmental advocacy group California Environmental Voters. Romero spoke during a news conference Tuesday announcing the bill.

The climate bill aims to hold corporations accountable

Romero described SB-253’s Scope 3 emissions reporting requirement as critically important, noting that Scope 3 emissions are, on average, “11.4 times higher than Scope 1 and 2 emissions.”

“There are corporate leaders today who are successfully disclosing their carbon footprints, so we know it can be done,” Romero said.

Wiener said transparency of the company’s carbon emissions data would help reduce corporate greenwashing, a term used when a company makes false claims about its environmental and climate actions.

Despite the original bill’s failure to pass the California Senate last year by a single vote, Wiener said he believes the nearly exact SB-253 has gained more support.

“Our coalition is even bigger and stronger this year, and we know we can push this important legislation,” he said during the conference.

We support these bills because the current climate reporting environment is fragmented, incomplete, and often unverified.

Sarah SachsSenior Public Policy Fellow, Ceres

Sarah Sachs, senior fellow for state policy at Ceres, a national sustainability nonprofit, applauds California’s climate bills. Ceres supported SB-253 as well as the Climate Financial Risk Act introduced Tuesday by Sen. Henry Stern (D-Calabasas), which would require companies to prepare climate financial risk reports detailing describes how climate change may affect the company’s business.

The SEC’s proposed national rule would also require companies to report on floods, fires and other climate-related risks facing business operations.

“We support these bills because the current landscape of climate reporting is fragmented, incomplete and often unverified,” Sachs said during the press conference. “These gaps in publicly available emissions data and reporting of climate risks create a huge blind spot for consumers, investors and policymakers seeking to understand the scale of the challenge or derive meaningful economy-wide insights.”

Mackenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget Editorial, she was the chief reporter for Wilmington StarNews and crime and education reporter at Regular Wabash Dealer.

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