California Leads the Nation with Groundbreaking Climate Disclosure Bill
On September 12, 2023, California’s state Senate approved Senator Scott Wiener’s (D-San Francisco) Senate Bill 253 (SB 253), named “the Climate Corporate Data Accountability Act.” The SB253 is the first-in-the-nation measure to mandate large corporations operating in California to reveal their entire greenhouse gas (GHG) emissions in alignment with the GHG Protocol. The purpose behind SB 253 is transparency. By requiring this disclosure, the public, investors, and stakeholders will better understand which corporations are walking the talk regarding climate action.
Over 20 companies, institutions, and industry groups have signed separate letters to support SB 253. The companies include tech giants such as Microsoft, Salesforce, Apple, and Google; software industry leaders such as Adobe and Atlassian; apparel industry frontrunners such as American Apparel, REI Co-op, and the Footwear Association; and other notable companies such as Sierra Nevada Brewing, IKEA USA. This collective backing by some of the most recognizable names across diverse sectors underscores the bill’s importance in spearheading corporate environmental responsibility and transparency.
Key Highlights of the SB 253
1. Expanding the scope of disclosure SB 253 requires the corporation to go beyond merely reporting direct emissions (scope 1 and Scope 2) but will be obligated to disclose indirect emissions across their entire supply chains (scope 3). This is particularly crucial because for many corporations, these emissions can account for over 90% of their total carbon footprint.
2. Target demographic SB263 mandate affect companies that operate within California and earn at least $1 billion annually. These corporations will be required to report scope 1, 2, and 3 emissions generated in their supply and value chains.
3. GHG protocol alignment The bill requires that large corporations conducting business within California’s state boundaries align with the GHG Protocol standards.
What’s Next for Climate Accountability in California?
California’s legislative focus on environmental responsibility doesn’t end with SB 253. The Assembly is preparing to deliberate on another influential piece of legislation, SB 261. If passed, this bill would mandate companies with revenues exceeding $500 million to disclose their entire carbon emission (e.g., scope 1, 2, and 3). More than 5,300 companies would apply to BS 253, and more than 10,000 companies would be covered by BS 261 if both are signed into law.
Don’t hesitate to contact us, Dynimos, if you are seeking assistance with preparing climate disclosures and carbon emission measurements in alignment with company compliance requirements.
Reference:
SB-253 Climate Corporate Data Accountability Act. (2023, January 30). California Legislative Information. Retrieved from https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB253
Clifford, C. (2023, September 13). California lawmakers send bill to governor that requires big businesses to provide a detailed account of their carbon emissions. CNBC. Retrieved from https://www.cnbc.com/2023/09/13/california-lawmakers-send-carbon-accounting-bill-to-governors-desk.html
Senator Wiener’s first-in-nation climate corporate carbon disclosure bill heads to the governor. (2023, September 12). Senate California Government. Retrieved from https://sd11.senate.ca.gov/news/20230912-senator-wiener%E2%80%99s-first-nation-climate-corporate-carbon-disclosure-bill-heads-governor
Binnie, I. (2023, September 13). California Senate passes climate bill, governor must decide by Oct 14. Reuters. Retrieved from https://www.reuters.com/world/us/california-climate-bill-clears-senate-governor-newsom-have-final-say-2023-09-12/
California’s first-in-the-nation climate disclosure legislation sets new standard for corporate transparency. (2023, September, 11). Ceres. Retrieved from https://www.ceres.org/news-center/press-releases/californias-first-nation-climate-disclosure-legislation-sets-new
