California is poised to force major companies to disclose their greenhouse gas emissions, the most sweeping mandate of its kind and one that could have major implications for the broader economy, given the state’s size and prominence.
The state Senate approved the emissions disclosure legislation on Tuesday in a 27-8 vote, sending the bill to the governor’s desk for final approval. The measure cleared the Assembly Monday night in a 41-20 vote after passing the full Senate earlier this year. The bill would require thousands of public and private businesses operating in the Golden State that make more than $1 billion annually to report their indirect and direct emissions.
OVERSIGHT RANKING MEMBER RASKIN SAYS GOP’S BIDEN INVESTIGATION IS A ‘TOTAL BUST’
“We need the full picture to make the deep emissions cuts that scientists tell us are necessary to avert the worst impacts of climate change,” said Democratic Sen. Scott Wiener, who introduced the measure. “These disclosures are simple but transformational, which is why companies like Apple are already reporting their emissions and calling them essential to their corporate climate goals. We need strong transparency to create a level playing field among private and public companies. Once again, California is leading the nation on essential climate action.”
Significantly, the bill requires both public and private companies to report “Scope 3” emissions, which are those included in a business’s value chain or in the use of its products, a crucial consideration for energy companies.
While the bill has become one of the most high-profile climate bills in the state and has racked up support from major companies such as Google and Apple, a number of business groups have come out in opposition of the bill, arguing that it’s too burdensome.
Gov. Gavin Newsom (D-CA) declined to share his position on the measure when asked about it last month, but his administration’s Department of Finance opposed the bill back in July, asserting that the plan would cost the state money that isn’t appropriated in its budget.
The policy would require more than 5,300 companies to report their emissions, according to Ceres, a nonprofit policy group supporting the bill.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
The measure appears to go significantly beyond a proposal from the U.S. Securities and Exchange Commission to require public companies to disclose emissions. The proposed rule mandates disclosures for Scope 1 and 2 emissions, which are emissions generated by a company’s own operations and through the energy it purchases. The proposed rule would also require Scope 3 disclosures, or indirect emissions that were created by the company’s value chain, but only if they’re material to the company or if the company has set an emissions target or goal that includes Scope 3. The Scope 3 requirements could be pared back in a final rule, and liberal congressional Democrats have lobbied the commission to tighten the requirements in the final measure.
The steps by California’s lawmakers reinforce that the state is paving the way for aggressive climate policy. Lawmakers are also weighing a bill that would require companies making more than $500 million annually to disclose how climate change poses a financial risk to their corporations.
