Senator Wiener’s First-In-The-Nation Climate Corporate Carbon Disclosure Bill Heads to the Governor
SACRAMENTO – The Senate approved Senator Scott Wiener’s (D-San Francisco) Senate Bill 253, the Climate Corporate Data Accountability Act — a first-in-the-nation measure requiring carbon disclosures from large corporations that do business in California. The bill — part of the Climate Accountability Package introduced by Senator Wiener, Senator Henry Stern (D-Los Angeles), and Senator Lena Gonzalez (D-Long Beach) — passed 27-8 and heads next to the Governor for final approval.
“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 Senator Wiener. “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.”
In the final weeks before the Assembly floor vote, SB 253 faced a wave of misinformation from opponents of the bill like the California Chamber of Commerce and SoCal Gas Company, which has a long history of using ratepayer dollars to fund dishonest campaigns against climate action.
A wave of major corporations including Apple, Amalgamated Bank, Levi’s, Google, Salesforce, and Microsoft announced support for the bill in the weeks leading up to the Assembly vote. Vocal support also came from internationally renowned climate leaders like Mary Nichols, former Director of the California Air Resources Board (CARB), and Tom Steyer, founder of NextGen America.
Last year, this bill passed the Senate and came within one vote of passage on the Assembly floor, despite intense corporate lobbying against it. This year, the coalition supporting the bill is even bigger and more diverse, including Ceres — a coalition of corporations focused on sustainability — coming on as a co-sponsor.
SB 253 is a first-in-the nation measure to require all large corporations that do business in California to publicly disclose their greenhouse gas (emissions) in line with the Greenhouse Gas Protocol, the longstanding gold accounting standard established by the environmental and business communities. These disclosures will include corporate supply chains (scope 3), which can include in excess of 90% of a corporation's carbon emissions. By requiring this disclosure, the public, investors, and others will better understand which corporations are walking the talk when it comes to climate action.
With no standardized disclosure requirements, some corporations attempt to deflect scrutiny from their contributions to the climate crisis. Due to the lack of transparency around their climate risks and impact, large corporations currently evade the scope of many state regulations, and can mislead potential customers who wish to minimize their contributions to the climate crisis.
Fortunately, many corporations have taken steps to disclose their climate impacts, demonstrating that many companies are committed to climate action, and proving that the disclosures are not excessively onerous. As of 2020, 81% of S&P 500 companies voluntarily reported their direct (scope 1 and scope 2) emissions in corporate social responsibility reports. Nearly two-thirds of the top 500 publicly traded companies in the U.S. disclose at least part of their Scope 3 emissions.
In recent months, fossil fuel interests have continued to escalate attempts to coerce investors to stop moving away from fossil fuels and towards a clean energy system through practices like ESG investing. States like Texas and West Virginia have cracked down on ESG investing and moved state funds away from banks that stopped investing in new fossil fuel development. While red states attempt to use their markets to prop up the harmful fossil fuel system of the past, the Climate Accountability Package upholds California’s legacy as an environmental leader by helping empower investors to propel the state into a clean energy future. The package empowers investors with essential transparency into major risks to their portfolios, protects their freedom to invest according to their values, and aligns public investments with California’s ambitious climate goals.
The Climate Corporate Data Accountability Act is sponsored by EnviroVoters, Ceres, the Greenlining Institute, Sunrise Bay Area, and Carbon Accountable.
Read more about SB 253 here:
California Emissions-Disclosure Mandate Awaits Final Passage, Among Other Bills (Wall Street Journal, September 9th)
California could mandate emissions disclosure even if the SEC doesn't (Washington Post, May 25th)
A push for corporate climate disclosures in California could influence rest of U.S. (Marketplace, March 3rd)