SB 253: Corporate Accountability on Climate Data

Senate Bill 253 by Senators Scott Wiener (D-San Francisco), Lena Gonzalez (D-Long Beach), and Henry Stern (D-Los Angeles), was introduced to require the California Air Resources Board (CARB) to adopt regulations that would require large businesses to disclose to an emissions registry their greenhouse gas emissions from the prior year. SB 253 would add Health and Safety Code Section 38532.

Section 1 includes a dozen legislative findings and declarations, including that California investors, consumers, and other stakeholders deserve transparency from companies regarding their greenhouse gas emissions to inform their decision-making. In addition, accurate, verified, and comprehensive data is required to determine a company’s direct and indirect GHG emissions.

In addition, mandating annual, full-scope GHG emissions data reporting to the emissions registry for all United States companies with total annual revenues in excess of $1 billion that do business in California, as well as ensuring public access to the data in a manner that is easily understandable and accessible, will inform investors, empower consumers, and activate companies to improve risk management in order to move towards a net-zero carbon economy and is a critical next step that California must take to protect the state and its residents.

Section 2 of the bill would add Health and Safety Code Section 38532 to name this law the Climate Corporate Data Accountability Act. It would define the following terms: “emissions registry,” “reporting entity,” “Scope 1 emissions,” “Scope 2 emissions,” and “Scope 3 emissions.”

Prior to January 1, 2025, CARB would be required to adopt regulations to require a reporting entity to annually disclose to the emissions registry, and verify, all of the reporting entity’s scope 1 emissions, scope 2 emissions, and scope 3 emissions. CARB’s regulations must require specified provisions be included, such as requirements on a reporting entity.

In addition, a reporting entity must make an easily understandable public disclosure, include the name of the reporting entity. And have a public disclosure that is independently verifiable by the emissions registry or a third-party auditor. CARB would be required to establish auditor qualifications and a process for approval of auditors that ensures sufficient auditor capacity.

Moreover, CARB would be required to contract with an emissions registry to develop a reporting and registry program to receive and make publicly available disclosures required by this new law.  CARB, in adopting regulations, would have to consult with the state Attorney General, other government stakeholders, investors, consumer and environmental justice interests, and reporting entities.

Prior to July 1, 2027, CARB would be required to contract with the University of California, the California State University, a national laboratory, or another equivalent academic institution to prepare a report on the public disclosures made by reporting entities to the emissions registry. The report must be made publicly available on the digital platform required to be created by the emissions registry.

The emissions registry would be required to create a digital platform accessible to the public that will house all disclosures submitted by reporting entities to the emissions registry under the regulations adopted by CARB. The disclosures must be made within 30 days of receipt.

If the Attorney General were to find that a reporting entity has violated or is violating this section, or upon a complaint received from CARB, the Attorney General may bring a civil action against that reporting entity seeking civil penalties for violations of this section. This implementation of this new law is contingent upon an appropriation by the Legislature in the annual Budget Act or another statute for its purposes.