Tag: Greenhouse gases: climate-related financial risk
California Governor Newsom confirms will sign major climate bills
The suspense is over. The AP is reporting that California Governor Gavin Newsom said on Sunday that he “plans to sign into law a pair of climate-focused bills intended to force major corporations to be more transparent about greenhouse gas emissions and the financial risks stemming from global warming.” Those bills are Senate Bill 253, the Climate Corporate Data Accountability Act, and SB261, Greenhouse gases: climate-related financial risk. SB 253 would mandate disclosure of GHG emissions data—Scopes 1, 2 and 3—by all U.S. business entities (public or private) with total annual revenues in excess of a billion dollars that “do business in California.” SB 253 has been estimated to apply to about 5,300 companies. SB 261, with a lower reporting threshold of total annual revenues in excess of $500 million, would require subject companies to prepare reports disclosing their climate-related financial risk, in accordance with TCFD framework, and describing their measures adopted to reduce and adapt to that risk. SB 261 has been estimated to apply to over 10,000 companies. For more information about these two bills, see this PubCo post.
California climate bills head to Governor— will he sign? [reposted]
Two far-reaching California climate bills, together the “Climate Accountability Package,” have passed in the California legislature and are headed to Governor Gavin Newsom for a final decision. If signed into law, Senate Bill 253, the Climate Corporate Data Accountability Act, would mandate disclosure of GHG emissions data—Scopes 1, 2 and 3—by all U.S. business entities (public or private) with total annual revenues in excess of a billion dollars that “do business in California.” SB 253 has been estimated to apply to about 5,300 companies. Final amendments to the companion bill, SB261, Greenhouse gases: climate-related financial risk, passed in the California legislature yesterday. SB 261, with a lower reporting threshold of total annual revenues in excess of $500 million, would require subject companies to prepare reports disclosing their climate-related financial risk, in accordance with TCFD framework, and describing their measures adopted to reduce and adapt to that risk. SB 261 has been estimated to apply to over 10,000 companies. While there has been substantial opposition to these bills, Bloomberg has reported that “[c]orporate support for the legislation has been growing this year. More than a dozen companies have submitted a letter to lawmakers in support of SB 253” and another dozen wrote in support of SB 261, including, in both cases, some very familiar names. Will the Governor sign these bills into law? Newsom has not yet weighed in. According to the NYT, historically, Newsom “has championed aggressive new climate measures,” but, on SB 253, he has been “uncharacteristically quiet,” perhaps given that his “administration’s finance department issued an analysis in July that opposed the emissions reporting legislation.” Newsom has until October 14 to sign or veto the bills. If he does neither, the measures will become law automatically.
Is California going to set the gold standard on climate disclosure?
Are you fretting about when (or if) the SEC is going to take action on its climate disclosure proposal and what exactly the SEC has in store for public companies in its final regulations? Consider this: California might just beat the SEC to the punch. You might remember that, in 2021, a California State Senator introduced the Climate Corporate Accountability Act, which failed last year after sailing through one chamber of the legislature but coming up one vote shy in the second (see this PubCo post). But that bill was re-introduced this year as the Climate Corporate Data Accountability Act (SB 253) and packaged with other bills, notably SB 261, Greenhouse gases: climate-related financial risk, into California’s Climate Accountability Package, a “suite of bills,” according to the press release, “that work together to improve transparency, standardize disclosures, align public investments with climate goals, and raise the bar on corporate action to address the climate crisis. At a time when rising anti-science sentiment is driving strong pushback against responsible business practices like risk disclosure and ESG investing,” the press release continued, “these bills leverage the power of California’s market to continue the state’s long tradition of setting the gold standard on environmental protection for the nation and the world.” (See this PubCo post.) If signed into law this time, SB 253 would mandate disclosure of GHG emissions data—Scopes 1, 2 and 3—by all U.S. business entities with total annual revenues in excess of a billion dollars that “do business in California.” SB 261, with a lower reporting threshold of $500 million, would require subject companies to prepare reports disclosing their climate-related financial risk, in accordance with TCFD framework, and describe their measures adopted to reduce and adapt to that risk. If signed into law, according to Bloomberg, SB 253 would apply to over 5,300 companies and SB 261 would apply to over 10,000 companies. But, given their history, what makes anyone think these bills will be signed into law this time? As Politico observes, “[w]hen do you know a bill might have legs? When there’s a bit of horse-trading going on.” And that’s apparently just what’s been happening recently with these bills.
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