(Bloomberg) -- California state legislators passed a bill Tuesday that would leapfrog the US Securities and Exchange Commission’s efforts to require companies to disclose their greenhouse gases and climate-related financial risks.As the world’s fifth-largest economy, California’s environmental rules are quickly followed by other states, even when they exceed federal requirements. The Golden State’s proposal, known as the Climate Corporate Data Accountability Act, would force many of the world’s
The bill backed in California now heads to Democratic Governor Gavin Newsom’s desk. If he signs it into law as expected, companies in the US would for the first time not only have to account for their own pollution, but also the emissions of suppliers and customers using their products. That concept, known as scope 3 reporting, was also included in the SEC plan.
California’s ambition to tackle carbon accounting is the latest example of the state positioning itself as a climate leader when federal efforts lag. The proposed measure is more expansive than the SEC effort because it’d affect private and public companies doing business in the state—5,300 companies that generate at least $1 billion of annual revenue.
In a Sept. 10 letter, Mary Nichols, former chair of the California Air Resources Board, expressed her support for the bills. In California, the Western Growers Association is among the fiercest opponents of the state bill, along with the Western States Petroleum Association, which has already spent $2.38 million on lobbying and advocacy this year.
Gensler said in March that far fewer companies account for scope 3 emissions, mainly because calculations for the data aren’t as “well-developed.”
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