California’s Corporate Emissions Disclosure Law Amended to Address Cost and Burden Concerns

Governor Gavin Newsom recently received proposed amendments to California’s corporate emissions disclosure law from the California Chamber of Commerce and other business groups. The current law, SB 253, requires large corporations in the state to disclose their greenhouse gas emissions. However, the proposed amendments aim to address concerns regarding the cost and burden of compliance with the law, particularly related to disclosing Scope 3 emissions which encompass a company’s entire value chain.

The business coalition behind the proposed amendments has expressed concerns about the financial impact of complying with the law. Governor Newsom himself has also acknowledged the need for potential amendments due to cost and implementation issues with the law. CalChamber has been advocating for amendments to the law, known as a “cleanup” legislation, since its signing last year.

The proposed amendments seek to balance the need for emissions disclosure with practical considerations for businesses operating in California. The law is unique in the nation for its inclusion of Scope 3 emissions disclosure requirements, despite the Securities and Exchange Commission deciding against including such requirements in its federal climate risk disclosure rule. This highlights the importance of state-level action on climate change and reducing greenhouse gas emissions.