News Summary
California Attorney General Rob Bonta is pushing for the enforcement of SB 253, the state’s corporate emissions reporting law. This comes in light of a lawsuit from a business group aiming to block its implementation. SB 253 requires large companies to report their greenhouse gas emissions, with significant penalties for non-compliance. Legal challenges are ongoing, but the state remains determined to enhance corporate transparency on emissions and climate-related risks.
California Attorney General Seeks Enforcement of Corporate Emissions Reporting Law
California Attorney General Rob Bonta is advocating for the enforcement of the state’s corporate emissions reporting statute, known as SB 253. This push comes as a business group challenges the law in a federal court, seeking to halt its implementation. Bonta’s legal team argues that enforcing SB 253 will not cause irreparable harm to businesses while the legal proceedings continue.
Details of SB 253
Enacted in 2023, SB 253, or the Climate Corporate Data Accountability Act (CCDAA), requires both public and private companies in the United States with annual revenues exceeding $1 billion and doing business in California to provide data on their greenhouse gas (GHG) emissions. This data includes Scope 1, 2, and 3 emissions, which encompass direct emissions and emissions from energy used in operations, logistics, and supply chains.
The first reports detailing Scope 1 and 2 emissions are due by January 2026, focusing on the previous fiscal year’s data (2025). Reports concerning Scope 3 emissions are scheduled for submission in 2027. Companies that fail to comply with these reporting requirements could face substantial penalties, potentially reaching up to $500,000. As part of this law, companies will also be required to undergo third-party assurance assessments to validate the accuracy of their emissions reports.
Legal Challenges and Legislative Developments
The U.S. Chamber of Commerce filed a lawsuit against California in 2024, claiming SB 253 infringes on First Amendment rights and other constitutional protections. Despite this legal challenge, the California Air Resources Board (CARB) announced in December 2024 that it would not penalize companies for incomplete or inaccurate reporting during the first compliance cycle, provided that effort is made in good faith.
Additionally, Governor Gavin Newsom had previously raised concerns regarding the practicality of the implementation timelines of SB 253. To address these concerns, the California legislature passed SB 219, which pushed CARB’s deadline for adopting regulations from January 1, 2025, to July 1, 2025, while keeping the compliance deadlines for reporting unchanged.
Future Implications
With CARB signaling it will use enforcement discretion regarding the first reports due in 2026, companies are encouraged to assess their revenue status concerning SB 253 and establish systems for tracking their GHG emissions. The repercussions of California’s emissions laws could also drive other states, like New York and New Jersey, to consider similar climate accountability legislation.
As California continues to pursue greater corporate transparency regarding emissions and climate-related financial risks, the outcome of the ongoing legal battles and the subsequent reports may have significant implications for corporate operations across the nation. The enforcement of SB 253 aligns with broader efforts to combat climate change by holding corporations accountable for their environmental impact.
Stakeholders, including businesses and environmental organizations, are closely monitoring the developments surrounding SB 253 as the state seeks to implement these groundbreaking disclosure laws aimed at enhancing climate accountability and overall corporate responsibility within the market.
Deeper Dive: News & Info About This Topic
- Vela Insights: California Provides Flexibility on Greenhouse Gas Emissions Reporting Law
- Ropes Gray: California Issues Important Enforcement Guidance for its New GHG Emissions Disclosure
- Daily Journal: Red Tape or Green Future? Unpacking California’s Climate Disclosure Laws
- Wikipedia: Greenhouse Gas Emissions
- Google Search: California Greenhouse Gas Emissions Reporting
