California lawmakers are renewing an effort 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 backed by eight other Senate Democrats as part of three climate bills aimed at advancing California's climate goals. SB-253 would require corporations 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 the 2022 California legislative session, but failed to pass after running into backlash around its reporting requirement.
Companies are not required to report their carbon 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, 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 effort is similar to an effort underway at the U.S. Securities and Exchange Commission (SEC), which is working on a climate risk disclosure rule requiring publicly traded companies to provide carbon emissions data. SB-253 goes beyond what the 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 of comprehensive greenhouse gas emissions reporting from the largest corporations who have an outsized impact and an outsized responsibility to be part of the solution," said Melissa Romero, senior legislative manager at environmental advocacy group California Environmental Voters. Romero spoke during a press conference Tuesday announcing the bill.
Climate bill aims to hold corporations accountable
Romero described SB-253's scope 3 emissions reporting requirement as critically important, noting that scope 3 emissions are on average "11.4 times higher than scopes 1 and 2 emissions."
"There are corporate leaders who are successfully disclosing their carbon footprints today, so we know it can be done," Romero said.
Wiener said transparency into a company's carbon emissions data will help cut down on corporate greenwashing, a 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 floor last year by one vote, Wiener said he believes the nearly exact SB-253 has garnered 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.
Sarah SachsSenior associate of state policy, Ceres
Sarah Sachs, senior associate of state policy at Ceres, a national sustainability nonprofit organization, applauded the California climate bills. Ceres backed SB-253 as well as the Climate-Related Financial Risk Act introduced Tuesday by Sen. Henry Stern (D-Calabasas), which would require companies to prepare climate-related 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 facing 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 who are seeking to understand the scale of the challenge or derive meaningful insights across the entire economy."
Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget Editorial, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.