SACRAMENTO, Calif. — California is expected to implement a first-of-its-kind law focused on corporate climate accountability.
Senate Bill 253, the Corporate Climate data Accountability Act by State Senator Scott Wiener, would require companies in California that earn over $1 billion in revenue to track and report their greenhouse gas emissions.
The bill would be a landmark requirement as the Golden State looks to lower emissions in the fight against climate change.
While at a United Nations climate meeting in New York, Gov. Gavin Newsom announced he intends to sign the bill into law.
“That’s what California’s role is as a global leader on climate… is to create the roadmap for the world — to show them what it looks like to take action on climate in a scalable and fast way,” said Melissa Romero, the legislative manager for California Environmental Voters — one sponsor of SB 253.
The bill would require major companies to track their scope one, two and three emissions. Scopes one and two are related to a manufacturer’s direct and indirect emissions from their facilities.
Scope three requires companies to track the emissions of their entire supply chain.
Most opposition to the bill was directed at the requirement of scope three emissions.
“… It’s costly, it’s burdensome and we don’t even have any rules to identify how we’re supposed to do that,” said Lance Hastings, president and CEO of the California Manufacturers and Technology Association.
A majority of the large corporations the bill would impact already track their carbon footprint. Companies like Apple, Microsoft and Ikea supported SB 253 when it was going through the legislative process.
“It’s not actually a new practice or a new cost on them, it’s really about that public transparency piece which we know is the number one motivator for companies to change their ways and do the right thing,” Romero said.
Hastings argues companies already care about lowering their emissions, as they are constantly evaluating how to run as efficiently as possible, and imposing a penalty creates an unnecessary cost without helping solve a problem.
“This is a mandate on manufacturers. We’re going to spend millions of dollars to just inventory and report instead of spending that money on reducing emissions,” Hastings said.
Once Gov. Newsom signs the bill into law, companies would need to report their scope one and two emissions in 2026 and scope three by 2027.
Corporations that fail to report their emissions could face a $500,000 fine.
“This is going to have impacts beyond just California, beyond just the country — it’s going to have impacts around the world,” Romero said.
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