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Thousands of large companies operating in the state will be required to disclose their carbon emissions and climate-related financial risks under two first-of-its-kind laws. Notably, SB253 also requires companies to disclose Scope 3 emissions generated throughout their value chain.
State Sen. Scott Wiener, a San Francisco Democrat who sponsored SB253, said the lawsuit is “a direct denial of climate change.”
“Why is the Chamber of Commerce working so aggressively to obstruct basic transparency to the public? We know the answer,” Wiener said in a statement. “It’s not because of the Chamber’s bogus arguments about cost or implementation, because it’s cheap and easy for companies to disclose this information. It’s not because of the House’s bizarre and frivolous First Amendment arguments. No. Rather, the Chamber of Commerce is taking such radical legal action because many large corporations, especially fossil fuel companies and big banks, are trying to figure out how dramatically they are accelerating climate change. Because they’re absolutely afraid that they’re going to have to tell the public what they’re doing, because they’re going to mislead the public and investors.”
The two laws were enacted last year, led by the California Chamber of Commerce and Industry, over fierce opposition from businesses. Specifically, Newsom expressed concerns about SB253’s implementation timeline and potential costs to businesses, choosing not to fund the California Air Resources Board’s rulemaking process for the law in his recently announced budget. did. Calchamber had previously hinted at a desire for a “clean-up” bill.
Newsom spokesperson Alex Stack said in a statement that the governor is “reviewing this complaint” and said in a statement that the new law “demonstrates a bold response to climate change” for the state. He pointed to Newsom’s message. We are turning information transparency into climate action. ”
The case sets the stage for a key legal battle over California’s ability to force large corporations and large polluters to disclose their emissions, but is likely to reverberate across the state as other companies try to follow suit. .
“To address climate change, we support cost-effective policies that reduce greenhouse gas emissions as quickly as possible,” CalChamber President and CEO Jennifer Barrera said in a statement. Ta. “However, these new climate reporting laws are far from cost-effective and will have no appreciable impact on climate change. Forcing companies to report inconsistent and inaccurate information will cost them unnecessarily large amounts of money. They risk being fined, which will be especially costly for small and medium-sized businesses that do not have the resources to accurately measure their climate emissions.”
California’s efforts come amid an evolving corporate disclosure landscape. Although many large companies do so voluntarily, jurisdictions around the world are seeking to codify disclosure standards in light of significantly increased investor interest in data.
The Securities and Exchange Commission has yet to finalize its nearly two-year-old climate risk disclosure rules, which have faced legal threats and political backlash. Meanwhile, European rules will require a wide range of new disclosures that also apply to large U.S. companies with operations on the continent, such as a company’s carbon footprint.
And in the wake of California’s new law and delays at the SEC, other blue states, including Washington, New York and Illinois, are proposing their own copycat bills modeled after the law passed by Sacramento.
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