SACRAMENTO, Calif. — California’s groundbreaking laws requiring large companies to disclose their greenhouse gas emissions and climate-related risks face potential obstacles that could allow polluters to conceal their climate impacts. The U.S. Chamber of Commerce and other business groups have sued to block the laws, claiming they infringe on First Amendment rights by compelling companies to release information on climate change. Surprisingly, Governor Gavin Newsom, who signed the bills into law, is now showing resistance and seeking to water down the requirements.
California became the first state to pass laws mandating standardized, public reporting of greenhouse gas emissions from oil companies, banks, and other industries. Senate Bill 253 requires companies with annual revenues of over $1 billion to disclose their greenhouse gas emissions, while SB 261 mandates corporations with revenues over $500 million to disclose their climate-related financial risks. These laws aim to hold businesses accountable for their climate pledges and encourage more sustainable practices.
However, industries such as oil and gas, banking, and other business interests are determined to keep their carbon footprints and climate risks hidden. This pressure seems to have influenced Governor Newsom. While initially announcing support for the disclosure bills, he now raises concerns about implementation deadlines, the emissions reporting protocol, and the financial impacts on businesses. Newsom’s office is working on amendments to address these issues, but specific changes have not been disclosed.
State Senator Scott Wiener, the author of SB 253, is open to technical fixes to the law but opposes substantive changes or delays. He believes that the fossil fuel industry, chambers of commerce, and banks are resistant to transparency because they do not want the public and investors to know the extent of their environmental impact.
This battle in California takes on greater significance as fossil fuel companies and other business interests nationwide resist transparency regarding their role in causing climate change. The state’s legislation sets an example for other states like New York and Illinois, which are considering similar laws.
The urgency to pass and enforce these laws is underscored by the recent decision by the U.S. Securities and Exchange Commission (SEC) to remove ambitious emissions reporting requirements for publicly traded companies. California’s legislation goes beyond the SEC’s proposal by applying to privately held companies and requiring them to quantify the full extent of their emissions, including supply chains and customer usage.
Weakening these laws would primarily benefit major polluters, including influential oil companies that Governor Newsom previously criticized and pledged to hold accountable. Corporations like ExxonMobil and Chevron, known for decades of climate denial and disinformation, have the most to lose from public awareness of their ongoing damage to the planet.
California’s leaders must recognize the importance of both passing new laws to combat climate change and effectively enforcing them. Swift allocation of funding to implement these laws and rejection of any significant changes that would weaken them is essential. By doing so, California can continue leading the way in addressing the climate crisis.