"A
major step for climate action, requiring large corporations to
disclose their entire carbon footprint - is on its way to the
Governor!" Democratic Senator Scott Wiener wrote on social media
site X after the chamber voted 27-8 to pass the bill.
It would require public and private companies that operate in
California and earn more than $1 billion a year to do the
accounting, Wiener said.
The California bill was supported by several big companies
including Apple, Ikea and Microsoft, but it was opposed by the
Chamber of Commerce business group which called it "onerous."
Companies are under mounting pressure from governments and
shareholders to disclose their contributions to greenhouse gas
emissions that warm the global climate and endanger traditional
business models. The U.S. Securities and Exchange Commission
(SEC) has not yet finalized its rules on disclosure.
Newsom's office said the governor has until Oct. 14 to act on
the legislation, offering no further comment in response to a
Reuters request.
Democrat-dominated California has long has had some of the
strictest environmental rules in areas like vehicle fuel
efficiency standards and planning policy, after passing a
climate change law in 2006. In recent years, attempts to manage
risks linked to environmental, social and governance (ESG)
factors have been hotly contested and left deep divides between
some states.
The bill tackles one of the thorniest issues in climate
regulation by asking companies to measure and report a complex
category of indirect emissions linked to their supply chains and
end-users, known as Scope 3. The California Chamber of Commerce
blasted the measure, calling it "an onerous emissions tracking
and paperwork requirement that will increase costs on California
businesses".
The law may face other hurdles even if Newsom approves it.
"I expect the legislation to be challenged in court," said Steve
O'Day, a partner at law firm Smith Gambrell Russell, although
"if it does become active it will begin to force analysis and
disclosure of life cycle greenhouse gas emissions" ahead of the
SEC's proposed federal rule.
(Reporting by Isla Binnie in New York; Editing by David
Gregorio)
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