Last Updated on October 1, 2023 by BVN
Earlier this month, California Gov. Gavin Newsom unveiled his commitment to sign two pioneering climate bills, Senate Bills 253 and 261. These laws, initially introduced as part of the Climate Accountability Bill Package in January, mark significant strides in California’s fight against climate change. Senate Bill 252, the third component of the package, is expected to clear the Assembly in 2024.
Senate Bill 253: Climate Corporate Leadership and Accountability Act
Newsom has confirmed his intent to sign Senate Bill 253, the Climate Corporate Leadership and Accountability Act. This legislation will mandate all major U.S.-based corporations operating in California with annual revenues exceeding $1 billion to publicly disclose their comprehensive carbon footprint in an easily accessible and understandable format. The bill will require these corporations to annually report their complete greenhouse gas (GHG) emissions to a non-profit emissions registry contracted by the California Air Resources Board (CARB).
“When business leaders, investors, consumers, and analysts have full visibility into large corporations’ carbon emissions, they have the tools and incentives to turbocharge their decarbonization efforts,” said Sen. Scott Wiener (D-San Francisco), author of Senate Bill 253, emphasizing the significance of transparency.
Notable companies like Campbell’s, Kellogg’s, Nestle, Kraft-Heinz, Coca-Cola, General Mills, Anheuser-Busch, and Mars Candy have already been proactive in disclosing their emissions. SB 253 has received public support from companies such as IKEA, Patagonia, Sierra Nevada, Apple, Microsoft, Salesforce, and Google. Experts said GHG emissions data is critical to the transition towards a net-zero economy. The bill is co-sponsored by the California Environmental Voters, Carbon Accountable, CERES, the Greenlining Institute, and Sunrise Bay Area, with various other organizations rallying behind it.
Senate Bill 261: Climate-Related Risk Disclosure Act
Additionally, Gov. Newsom is set to sign Senate Bill 261, authored by Senator Henry Stern (D-Ventura and Los Angeles County), known as the Climate-Related Risk Disclosure Act. This bill targets U.S. corporations conducting business in California with revenues surpassing $500 million, requiring them to annually prepare and submit climate-related financial risk reports to the state. SB 261 aims to establish a standard practice for climate-related risk disclosures for corporations, partnerships, limited liability companies, and other business entities incorporated in California.
Miriam Eide, director of Fossil Free California, said that California can be a leader in climate finance.
“As Californians mop up from an unprecedented summer hurricane, after a winter marked by over $30 billion in flood damage, following year after year of wildfires tearing through communities left with loss of life, jobs, and places to live, we can’t afford to wait,” Eide said in a statement.
The legislation’s move toward standardized, reliable and mandatory climate risk disclosure is intended to provide critical information for informed decision-making when it comes to the impact of the climate crisis on California’s economy and capital markets.
Next on the Agenda: Senate Bill 252
Along with bill authors Wiener and Stern, Sen. Lena Gonzalez (D-Long Beach) introduced Senate Bill 252 (SB 252) which will mandate California’s public pensions, including CalPERS and CalSTRS — the largest pension funds in the U.S. — divest from fossil fuel companies by 2031. An additional five-year off-ramp provision will be in place should specified market conditions arise. SB 252 has gained substantial momentum, passing through three Senate committees and a full Senate floor vote. The bill has received endorsements from prominent figures across the state, including the County of Humboldt, Oakland City Attorney Barbara J. Parker, State Treasurer Fiona Ma, and the Los Angeles Times Editorial Board.
With California ranking as the world’s fifth-largest economy, this bill positions the state as a leader in risk-managed growth by shedding toxic and volatile fossil fuel investments from CalPERS and CalSTRS. SB 252 is scheduled for review by the Assembly Public Employment and Retirement Committee in 2024 and is co-sponsored by the California Faculty Association (SEIU Local 1983) and Fossil Free California.