California lawmakers are renewing efforts to make large corporations responsible for tracking and reporting carbon emissions.
California Senate Bill 253, also known as the Climate Corporate Data Accountability Act, was introduced Tuesday by Sen. Scott Wiener (D-San Francisco) and supported by eight other Senate Democrats as part of three climate bills aimed at advancing California’s climate goals. SB-253 would require companies with $1 billion or more in annual revenue to report their scope 1, 2 and 3 carbon emissions. The bill was first introduced as SB-260 in California’s 2022 legislative session, but failed to pass after facing backlash over its reporting requirements.
Companies are not required to report their CO2 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, heat 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 more difficult to track.
California’s effort is similar to one underway at the US Securities and Exchange Commission (SEC), which is working on a rule on climate risk information requires listed companies to provide data on CO2 emissions. SB-253 goes beyond what SEC’s rule would require by also making it a requirement for private companies.
The bill “closes a critical information gap that exists as a result of a lack of mandatory data collection and reporting requirements for comprehensive reporting of greenhouse gas emissions by the largest companies that have an overall influence and responsibility to be part of the solution.” said Melissa Romero, senior legislative manager at the environmental advocacy group California Environmental Voters. Romero spoke under one press conference publish the bill on Tuesday.
The purpose of the Climate Act is to hold companies accountable
Romero described SB-253’s scope 3 emissions reporting requirements as critically important, noting that scope 3 emissions are, on average, “11.4 times higher than scope 1 and 2 emissions.”
“There are business leaders who are successfully disclosing their carbon footprints today, so we know it can be done,” Romero said.
Wiener said transparency in a company’s carbon emissions data will help companies cut back greenwashinga 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 one 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 get this important legislation passed,” he said during the conference.
We support these bills because the current climate reporting landscape is fragmented, incomplete, and often unverified.
Sarah SachsSenior associate of state policy, Ceres
Sarah Sachs, senior associate of state policy at Ceres, a national sustainability nonprofit, applauded California’s climate bills. Ceres supported SB-253 as well as the Climate Financial Risks Act introduced Tuesday by Sen. Henry Stern (D-Calabasas), which would require companies to prepare climate financial risk reports detailing how climate change could affect the company’s business.
The proposed SEC rule at the national level would also require companies to report floods, fires and other climate-related risks towards business operations.
“We support these bills because the current climate reporting landscape is fragmented, incomplete and often unverified,” Sachs said during the press conference. “These gaps in publicly available emissions data and climate risk reporting create a massive blind spot for consumers, investors and policymakers seeking 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 a general reporter for Wilmington StarNews and a crime and education reporter on Wabash Plain dealer.
