SB 260: The Climate Corporate Accountability Act

Earlier this week, Senator Scott Wiener (D-San Francisco) introduced Senate Bill 260, which would enact the Climate Corporate Accountability Act. It will be amended to apply to all businesses with over $1 billion in revenue who are doing business in the State of California. The bill would add Section 38532 to the Health and Safety Code.

The current version of the bill would require the California Air Resources Board (CARB), on or before January 1, 2023, to develop and adopt regulations requiring publicly traded domestic and foreign corporations with annual revenues in excess of $1 billion that do business in California to publicly disclose their greenhouse gas emissions, categorized as scope 1, 2, and 3 emissions from the prior calendar year.

Section One of the bill contains twelve legislative findings and declarations, including the following:

(e) Corporations play a major role in the worsening climate crisis through emissions activities that include, but are not limited to, corporate operations, employee and consumer transportation, goods production and movement, construction, land use, and natural resource extraction.

(f) Accurate, verified, and comprehensive data is required to determine a company’s greenhouse gas (GHG) emissions, also known as its carbon footprint, and to effectively identify the sources of the pollution and develop means to reduce the same.

(g) To ensure reductions of GHG emissions are sufficient to address the climate crisis, it is necessary that a company set an emissions reduction target in line with the scale of reductions required to keep global warming at or below 1.5°C above preindustrial levels, as defined by the leading climate science.

(h) To ensure that corporate carbon emissions data disclosure and science-based emissions targets are actionable by the people of California, it is imperative that the information is conveyed in a manner that is understandable and accessible to the general public.

(l) Given the corporate sector’s major role in the worsening climate crisis and given the state’s overall leadership in addressing and reducing climate emissions, it is in the interest of the state to require corporate disclosure of carbon emissions data and science-based emissions targets.

Section Two of the bill would add Health and Safety Code Section 38532. This new section would be known as the Climate Corporate Accountability Act. It would define the terms “covered entity,” “science-based emissions target,” “Scope 1 emissions,” “Scope 2 emissions,” and “Scope 3 emissions.”

It would require, on or before January 1, 2023, CARB would develop and adopt regulations to require a covered entity to verify and annually report to CARB all of the covered entity’s scope 1 emissions, scope 2 emissions, and scope 3 emissions.

The bill would require a covered entity, on or before January 1, 2024, and annually thereafter, to publicly disclose all of the covered entity’s scope 1 emissions, scope 2 emissions, and scope 3 emissions for the prior calendar year in a manner that is easily understandable and accessible to residents of the state. The public disclosure will also have to be independently verified by a third-party auditor.

In addition, on or before January 1, 2024, CARB must develop and adopt regulations to require a covered entity to set a science-based emissions target based on the entity’s emissions that have been reported to CARB. This bill is likely to be heard in the first Senate policy committee in March.