Newsom mandates carbon emission disclosure for big corporations.
California Governor Signs Sweeping New Law Requiring Greenhouse Gas Emissions Disclosure
Governor Gavin Newsom of California, a Democrat, made a significant move on Saturday by signing a groundbreaking law that will compel large companies operating in the state to disclose their greenhouse gas emissions. This new law, known as SB-253, mandates that by 2025, all public and private companies with annual profits exceeding $1 billion must disclose both their direct and indirect greenhouse gas emissions. This includes emissions from their buildings, stores, employee travel, and transportation related to shipping their products.
Implications for Major Companies
Over 5,300 companies in California, including industry giants like Apple, Amazon, Chevron, and Wells Fargo, will be affected by SB-253. Failure to comply with the law will result in fines of up to $500,000 per year.
Expanding the Scope
Looking ahead to 2027, the law will go even further by requiring companies to disclose all “scope 3” emissions, which are emissions generated by their supply chains or by consumers using their products. This is particularly significant for energy companies.
In a signing statement, Governor Newsom emphasized that this new disclosure law demonstrates California’s commitment to addressing the climate crisis and taking decisive action. However, he also acknowledged the potential financial risks associated with the ambitious timeline and urged the California Air Resources Board to closely monitor and collaborate with the state legislature to mitigate any adverse impacts on companies.
Companion Bill and Criticism
Alongside SB-253, Governor Newsom also signed a companion bill, SB-261, which requires companies with annual profits exceeding $500 million to disclose climate-related financial risks every other year, starting in 2026. Failure to meet these reporting requirements will result in penalties of up to $50,000 annually.
Unsurprisingly, these laws have faced criticism from certain companies and the California Chamber of Commerce. Jennifer Barrera, the president and CEO of the chamber, expressed concerns about the significant changes in climate policy and the added obligations imposed on affected businesses. However, she also expressed a willingness to work with the governor’s office on clean-up legislation to address the concerns of their members, particularly small businesses.
For more information, click here to read the full article from The Washington Examiner.
What is the significance of including indirect greenhouse gas emissions in the disclosure requirement for multinational corporations?
Ultinational Corporations
The signing of SB-253 marks a significant step for climate action in California. With this new law in place, multinational corporations operating in the state will be required to take responsibility for their greenhouse gas emissions and provide transparency to the public. This will not only hold these companies accountable for their environmental impact but also help identify areas where emission reductions can be made. One key aspect of the law is the inclusion of indirect greenhouse gas emissions. This means that companies will have to disclose emissions resulting from their supply chains and the transportation of goods. This is a crucial step towards addressing the carbon footprint of the entire production process, rather than just looking at emissions from company-owned facilities. By considering their entire value chain, companies can more accurately assess the environmental impact of their operations and work towards reducing emissions on a broader scale. The requirement for disclosure extends to both public and private companies with annual profits exceeding $1 billion. By encompassing companies of different ownership structures, the law ensures that it applies to a wide range of businesses, including both local and international corporations. This move highlights California’s commitment to combating climate change regardless of the company’s size or ownership. The significance of this law extends beyond just the state of California. As one of the world’s largest economies and a hub for multinational corporations, California’s actions hold global implications. The disclosure of greenhouse gas emissions by these companies will provide valuable information for investors, consumers, and activists alike. It will enable them to make informed decisions, mobilize for change, and push for greater sustainability in business practices. Furthermore, this law sets a precedent for other states and countries around the world. As California continues to lead in combating climate change, other jurisdictions may follow suit and introduce similar legislation. This could create a domino effect, where more and more companies are required to disclose their emissions, leading to increased accountability for their environmental impact globally. While some companies may initially see this law as burdensome, it presents an opportunity for innovation and transformation. By making their emissions data public, companies are forced to confront their environmental impact and work towards reducing it. This can drive technological advancements, foster the development of sustainable practices, and push for the transition to a low-carbon economy. In conclusion, Governor Gavin Newsom’s signing of SB-253 represents a crucial step towards a more transparent and responsible business sector in California. By requiring large companies to disclose their greenhouse gas emissions, the state is paving the way for greater sustainability and accountability. The implications of this law extend far beyond California, encouraging global action and setting an example for other jurisdictions. It is a landmark move towards addressing climate change and working towards a greener future.
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