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January 27, 2022

Corporations with more than $1 billion in annual revenue would be required to disclose all scopes of their greenhouse gas emissions to the California Secretary of State’s office under a first-of-its-kind bill the state Senate passed Jan. 26, 2022. The bill also requires the California Air Resources Board to produce a report that estimates how much these companies would have to reduce their emissions in order to avoid overall global temperature increases over 1.5 degrees Celsius. The international limit considered to avoid climate catastrophe.

The Climate Corporate Accountability Act now goes to the Assembly, for committee work before a final version is produced and forwarded to Democratic Governor Gavin Newsom for a signature.

An earlier iteration of the bill failed to make it through the Senate in 2020, but advocacy groups like California Environmental Voters campaigned to get an amended version of the bill to a vote. The bill, S.B. 260, passed 23-7.

“Many of the largest corporations doing business in California are not subject to [greenhouse gas] reporting laws, and those who do report their emissions usually do not report their full emissions footprint,” said a press release issued by state Sen. Scott Wiener, who coauthored the bill. “The lack of transparency from corporate polluters makes it more difficult to regulate emissions and set appropriate reduction targets.”

The corporate accountability bill will affect “the vast majority” of the country’s largest companies, nearly all of which do business in California. Companies today can disclose such emissions by choice, but few do.

S.B. 260 requires large corporations to track and report all Scope 1 and 2 emission categories associated with their business operations as well as the elusive Scope 3 emissions stemming from consumer use of their products and other indirect sources.

The bill requires the California Air Resources Board to adopt regulations by Jan. 1, 2024, requiring large corporations to begin reporting their emissions to the state sometime in 2025. Their emissions must first be independently verified by a third-party auditor approved by the state.