For the first time, the California State Legislature requires corporations and financial institutions to disclose their greenhouse gas emissions, through the Corporate Climate Data Accountability Act (CA SB 253 (23R)).
This new requirement, which affects more that 5,000 companies in California, is groundbreaking because the CA SB253 (23R) bill changes he way American companies report. Companies earning at least $1 billion per year and doing business in the state will need to to disclose their scopes 1, 2 (carbon is produced by their operations and electricity use) by 2026, and scope 3 emissions by 2027.
Disclosing âScope 3â emissions means also reporting emissions generated by their supply chains and customers. This covers emissions related to business travel, including air travel.
While the federal climate disclosure rules by Securities and Exchange only applies to publicly traded companies and wouldnât require all of them to disclose scope 3, or supply chain emissions, this new California bill also applies to privately held companies and would require full scope 3 disclosure.