California lawmakers are renewing efforts to make large companies responsible for tracking and reporting carbon emissions.
California Senate Bill 253, also known as the Climate Corporate Data Responsibility Act, was introduced Tuesday by Senator Scott Wiener (D-San Francisco) and supported by eight other Senate Democrats as part of an effort to Part of three climate bills advancing California’s climate goals. SB-253 will require companies with more than $1 billion in annual revenue to report their Scope 1, Scope 2 and Scope 3 carbon emissions. The bill was first introduced as SB-260 in the 2022 California legislative session but failed to pass after strong opposition to its reporting requirements.
Companies are not required to report their carbon emissions and are categorized as Scope 1, 2 and 3. Scope 1 emissions are from sources directly controlled by the company, while scope 2 emissions are generated indirectly through the purchase of electricity, heating and cooling. Scope 3 emissions are emitted by third parties, such as employees through commuting or business travel, or business partners in a company’s supply chain, making them harder to track.
California’s efforts are similar to those underway by the U.S. Securities and Exchange Commission (SEC), which is developing climate risk disclosure rules that would require public companies to provide carbon emissions data. SB-253 goes beyond the requirements of the SEC rules, which are also required for private companies.
The bill “closes critical information gaps that exist due to the lack of mandatory data collection and reporting requirements for comprehensive greenhouse gas emissions reporting by the largest companies with outsized influence and outsized responsibilities as part of the solution,” said Melissa Romero, senior legislative manager for environmental advocacy group California Environmental Voters. On Tuesday, Romero spoke at a news conference announcing the bill.
Climate bill aims to hold businesses accountable
Romero described SB-253’s reporting requirements for Scope 3 emissions as critical, noting that Scope 3 emissions are on average “11.4 times higher than Scope 1 and Scope 2 emissions.”
“There are some business leaders who are successfully disclosing their carbon footprint today, so we know it can be done,” Romero said.
Wiener said transparency of corporate carbon emissions data would help reduce corporate greenwashing, the term used when a company makes false claims about its environmental and climate actions.
Although the original bill failed to pass the California Senate by one vote last year, Wiener said he believes the nearly unanimous SB-253 has gained more support.
“Our coalition is stronger this year and we know we can pass this important legislation,” he said during the meeting.
We support these bills because the current climate reporting landscape is fragmented, incomplete, and often unverified.
Sarah SachsSenior Assistant for National Policy, Ceres
Sarah Sachs, senior associate for state policy at Ceres, a national sustainability nonprofit, applauded the California climate bill. Ceres supports SB-253 and the Climate-Related Financial Risks Act introduced Tuesday by Sen. Henry Stern (D-Calabasas), which would require companies to prepare climate-related financial risk reports detailing how climate change will affect their businesses .
Proposed SEC rules would also require companies to report flood, fire and other climate-related risks to their business operations.
“We support these bills because the current climate reporting landscape is fragmented, incomplete and often unsubstantiated,” Sachs said in a news conference. “These gaps in publicly available emissions data and climate risk reporting add to the This creates a huge blind spot for consumers, investors and policymakers looking to understand the scale of the challenge or gain meaningful insights across the economy.”
Makenzie Holland is a news writer covering big tech and federal regulation.Before joining TechTarget Editorial, she was wilmington star and a crime and education reporter Wabash General Distributor.
