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The California Climate Corporate Accountability Act

California Senate passed a bill that would require large businesses doing business in the state to fully disclose their greenhouse gas (GHG) emissions.

The Climate Corporate Accountability Act (CCAA) is the first law in the U.S. that would require firms that are doing business in California and generating more than $1 billion in annual revenue to disclose the full scope of their GHG emissions.  

The Senate Bill 260, which passed by a vote of 23 to 7, requires companies to make annual public disclosures of Scope 1, 2, and 3 emissions. These are the firms’ direct emissions such as fuel combustion, emissions from buying and using electricity, and indirect emissions from other sources such as supply chains.

Photo Courtesy Joel Durkee

“Corporate transparency and accountability are critically important when it comes to addressing our climate crisis,” said Senator Scott Wiener. “Corporate emissions are a huge contributor to climate change, but frankly, we don’t yet know the scope of the problem. That’s why we need to act quickly and decisively to ensure corporations are reporting their emissions. This is a landmark bill, and today’s vote is a big step forward for California’s fight against climate change.”

The bill is co-sponsored by Carbon Accountable, Sunrise Bay Area, and the California Environmental Voters.  The California Air Resources Board (CARB) will be responsible to review the published data and generate a report that the Secretary of State will be publishing online.

The large majority of the largest corporations based in the U.S. will be impacted by this bill because almost all have operations in California.

Until now, disclosure has been voluntary, and those who do report, do not disclose the full scope of their emissions. With the bill, firms will be required to engage a CARB-approved auditor who will be analyzing their GHG emissions inventory for public disclosure.

Photo Courtesy Lili Popper

“Climate change is an existential threat to our planet. With wildfires in California getting worse every year and sea levels rising, the people of California are already experiencing serious impacts of climate change. We must act quickly and boldly to change course,” stated the announcement. “Even in California, we have not made nearly as much progress on reducing carbon emissions as needed to reverse the impacts of climate change. SB 260 will help drastically reduce corporate pollution by providing an accurate representation of corporate emission data and thus creating more incentives for companies to lower their emissions.”

The bill now must pass in the Assembly and then be signed into law by Governor Gavin Newsom. The Senator’s office stated that the people of California have a right to know how much pollution is generated by large corporations. In addition, such a law would also help consumers make informed decisions when buying goods and services, and making investments in those firms.

“The California Senate sent a clear message to the world today with the passage of the California Corporate Climate Accountability Act (SB 260),” said Catherine Atkin, Esq., director of Carbon Accountable. “California has a long history of leadership with groundbreaking environmental legislation.  It’s time to give consumers, policymakers, and investors the information they need to make informed choices and to catalyze needed change and innovation.   By Requiring transparency of the carbon footprint of the nation’s largest corporations that reap the benefits of doing business in California, SB 260 moves us closer to that goal.”    

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