News Summary
California Attorney General Rob Bonta is pushing for the enforcement of SB 253, a law requiring large corporations to report their greenhouse gas emissions. As legal challenges arise, Bonta emphasizes the importance of accountability and outlines reporting deadlines and potential penalties for noncompliance. The law may inspire similar legislation in other states, indicating a growing movement for corporate transparency regarding environmental impacts.
California – California Attorney General Rob Bonta is advocating for the enforcement of the state’s corporate emissions reporting law as a federal court considers challenges to its implementation. The law under scrutiny, known as SB 253, mandates that large corporations provide accurate emissions data, but faces ongoing legal hurdles from business groups attempting to overturn it.
SB 253, enacted in 2023, requires that both public and private U.S. companies with annual revenues exceeding $1 billion and operating in California actively report their Scope 1, 2, and 3 greenhouse gas (GHG) emissions. Bonta’s legal team is arguing that enforcing the law will not cause irreparable harm to these companies, even while litigation is pending.
The U.S. Chamber of Commerce has spearheaded opposition against SB 253 since 2024, filing a lawsuit arguing that the law violates First Amendment rights. In addition, during a federal court hearing, Bonta emphasized the importance of holding companies accountable for their emissions reporting amidst the ongoing legal disputes.
Key Dates and Reporting Requirements
Under the terms of SB 253, companies are required to submit their first Scope 1 and Scope 2 emissions reports by January 2026. These documents must contain data regarding the previous fiscal year, 2025. Meanwhile, reports for Scope 3 emissions, which include indirect emissions from activities related to the company’s operations, are expected to be submitted by 2027.
California’s Air Resources Board (CARB) announced on December 5, 2024, that it will exercise leniency during the initial reporting cycle by not enforcing penalties for organizations that fail to submit complete or accurate emissions information, provided they demonstrate a good faith effort toward compliance.
Adjustments in Regulatory Timelines
Governor Gavin Newsom previously expressed apprehension regarding the feasibility of the implementation timelines when SB 253 was initially passed. In response to these concerns, the California legislature enacted SB 219, which extends CARB’s deadline to finalize reporting regulations from January 1, 2025, to July 1, 2025, but does not change the compliance deadlines for reporting.
CARB has confirmed it will use enforcement discretion when handling the first reports due in 2026. Companies must ensure that their emissions data aligns with the information they currently have or can reasonably collect by the time of the forthcoming Enforcement Notice.
Potential Penalties and Compliance
Noncompliance with the emissions reporting requirements could result in penalties of up to $500,000 for companies that do not meet the obligations. Additionally, a vital aspect of the law is the requirement for third-party assurance assessments, which will verify the credibility of the submitted emissions reports.
Organizations must proactively prepare for compliance by evaluating their eligibility under SB 253 and SB 261 and implementing systems to track their GHG emissions effectively. This preparation is crucial as companies begin to understand the potential financial risks and legal implications associated with noncompliance.
Broader Implications of California’s Legislation
The enactment of climate disclosure laws in California may inspire other states, such as New York and New Jersey, to introduce similar legislation aimed at enhancing corporate transparency about emissions and climate-related financial risks. These laws are part of a broader movement to compel companies to take responsibility for their environmental impact.
In summary, the efforts by the California Attorney General mark a significant step toward enforcing corporate accountability in emissions reporting. The outcome of the ongoing legal challenges surrounding SB 253 will not only impact businesses within California but may also set a precedent for climate accountability legislation nationwide.
Deeper Dive: News & Info About This Topic
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- Google Search: California emissions reporting law
