Newsom signs landmark corporate carbon disclosure bills. Now what?

California has taken another step in its effort to confront the looming threat of climate change.

On October 7^th Gov. Gavin Newsom signed SB 253, a first in the nation bill that will require public carbon disclosures from large corporations – defined as those “with total annual revenues in excess of $1 billion” – that do business in California.

The bill’s signing drew plaudits from Environmental Legislative Caucus co-chairs Senator Ben Allen (D-Santa Monica) and Assemblymember Laura Friedman (D-Glendale).

“Accountability is a central component of efforts to protect our planet, and that accountability must include requiring top earning businesses to disclose if they are doing their part to reduce climate pollution,” they said in an email to Capitol Weekly.

Newsom also signed SB 261, authored by Sen. Henry Stern (D-Los Angeles), which requires regulated corporations to report on their climate-related financial risks. Together the measures comprise what has come to be known as the Climate Accountability Package. Disclosures will be made in line with the Greenhouse Gas Protocol, a broadly used standard for reporting carbon emissions.

In crafting SB 253, Sen. Scott Wiener (D-San Francisco) leaned heavily on a 2017 report issued by the Climate Accountability Institute that claimed 71 percent of all industrial greenhouse gas emissions are produced by just 100 global companies.

While that figure has also been widely reported in many media outlets, it is worth noting here that Politifact, the fact-checking arm of the nonprofit Poynter Media Institute, rates that claim to be false.

Be that as it may, there is no question that SB 253 imposes reporting requirements not previously seen, specifically the public disclosure of scopes 1-3 carbon emissions, which include both direct and indirect carbon emissions from corporations.

“The scope 1, 2 and 3 emissions are incredibly important,” Wiener says. “They can sometimes compose over 90 percent of the corporation’s emissions, so that’s why scope 3 in particular [which entail indirect GHG emissions that occur in the value chain of the organization] was very important to keep in the bill, and we had to fight to keep it.”

There is no question that SB 253 imposes reporting requirements not previously seen, specifically the public disclosure of scopes 1-3 carbon emissions, which include both direct and indirect carbon emissions from corporations.

Wiener says the opposition to the measure was “very intense and broad” and included “a massive misinformation campaign” from some major California utilities.

“This is a really hard policy to pass, and that’s why I’m really proud of our coalition for passing it, and I’m grateful to my colleagues for their support,” he says.

Wiener’s reference is to a claim by SoCalGas that their natural gas is a “renewable” energy source. The company was also one of several Southern California utilities that issued a floor alert warning of the bill imposing high costs on the hundreds of Diverse Business Enterprises that with which SoCalGas works.

“That was a bold faced lie, because only companies with revenue of a billion dollars or more a year are covered by the bill,” he says. “So those kinds of scare tactics that SoCalGas and others were spreading were really unfortunate, because they’re just not true,” he says.

The SoCalGas effort also drew the attention of Attorney General Rob Bonta, who filed suit against the company for what he said were “numerous unqualified environmental marketing claims.” The utility eventually settled the litigation by agreeing to pay a $175,000 fine and to stop any future claims that natural gas is renewable.

The measure also drew opposition from the California Chamber of Commerce, which was one of a wide array of agencies submitting a veto request to Governor Newsom on September 18th, saying that “SB 253 will not lead to any reduction in emissions and will make it harder to comply with California’s Climate Goal.” The groups further claimed that “if organizations are required to invest in the extensive reporting requirements called for in SB 253, they will be dedicating less resources towards clean energy solutions.”

But the bill has also garnered support from a wide array of corporate entities.

“We had Apple, Google, Salesforce, Microsoft, Amalgamated Bank, IKEA, Patagonia, Dignity Health, and so on and so forth,” Wiener says. “We had support from very large corporations that are already doing this and who understand why it’s important to level the playing field.”

In a letter from one of those corporations, Apple director for state and local government affairs D. Michael Foulkes said fighting climate change was one of the tech giant’s “most urgent priorities, adding that “Throughout our environmental journey, we’ve emphasized the importance of measurement and reporting to help us understand our impact.”

Melissa Romero, Senior Legislative Manager with CA Environmental Voters believes SB 253 will be a game changer in the effort to mitigate global greenhouse emissions.

“SB 253 is a globally significant policy that will completely change the game on corporate transparency on greenhouse gas emissions,” she says. “Similar to other laws like labor laws and public health & safety laws, if a corporation is going to benefit from California’s economy and do business in our state, they have to be part of the solution. SB 253 will cover some of the largest corporations in the world, whose greenhouse gas emissions data will soon be public for people in California and across the world to see.”

So what happens next? Wiener says that is still to be determined, but vows that the information won’t disappear in a black hole of government bureaucracy.

“I can’t say with certainty which registry,” he says. “Maybe the Climate Registry, which is an existing nonprofit created by the state of California, but it’ll be easily accessible by the public. I think that this is an opportunity for the public to look under the hood, and to see who is walking the walk, and who is just talking to talk.”

There is no time to waste – companies must start reporting their scopes 1 and 2 emissions in 2026, with reporting on scope 3 starting in 2027. Wiener says that sense of urgency is not lost on him.

“There’s a lot more work to do in future,” he says.

Lola Watts is a former Capitol Weekly intern and a current student at UC Santa Barbara