New Law Passed by California Senate Requires Businesses to Disclose GHG Emissions
A Brief Summary
The first law in the U.S., the Climate corporate Accountability Act (CCAA) passed by the California Senate, requires big businesses to disclose their greenhouse gas emissions. The law got passed by a 23-7 vote in the Senate.
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The new legislation requires every business operating in California, generating over $1 billion in gross annual revenue, should disclose annually their emissions from all scopes, including Scope 1, 2 and 3.
According to Senator Scott Wiener, the law so far is the most comprehensive set of emissions reporting requirements for companies and will apply to the biggest firms in the U.S.
The new law comes at a time when businesses across the world are facing mounting pressure from stakeholders such as investors, regulators etc., to provide them with the details relating to ESG initiatives, sustainability goals and other environment-related targets. Not just in the U.S. but also across the world, several jurisdictions have declared moves towards required sustainability disclosure.
The bill passed in the Senate will proceed to the assembly then subsequently to the Governor, who may sign it into law. Lately, California launched a Climate-Related Risk Disclosure Advisory Group, which aims to support the development of a climate risk disclosure standard and mitigate the impact of climate change.
Senator Wiener said: “Corporate transparency and accountability are critically important when it comes to addressing our climate crisis. 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.”
