In what climate advocates are calling a game-changing move, Governor Gavin Newsom just confirmed that California is gearing up to make corporations lay all their climate cards on the table.
Speaking at a Climate Week event in the Big Apple, Newsom announced his plans to sign Senate Bill 253. This isn’t just any bill – it’s a massive step in the fight against the climate crisis. Under this bill, any company pulling in a cool $1 billion or more annually and operating within California’s borders will have to disclose all the climate risks they’re taking, including a complete emission accounting throughout their supply chain.
But what does this mean? It’s a three-pronged approach:
- Scope 1: The emissions a company directly churns out while making its products. Think machines and factories.
- Scope 2: The emissions from products or equipment a company buys. This includes energy for its buildings or plants.
- Scope 3: The often-forgotten, yet critical emissions produced by customers actually using a company’s products.
The shocking truth? That last category, scope 3, often forms the lion’s share of a company’s emissions. But hey, why acknowledge something that’s not in your direct line of sight, right?
In contrast to the modest regulations proposed by the Securities and Exchange Commission, California’s not holding back. This bill will apply to around 5,000 companies, highlighting where the real emission culprits lie in their operations.
Mindy Lubber, CEO of Ceres, a sustainability advocacy group, said it best: “This is exactly the kind of policy framework that investors have long sought.” Investors, consumers, and, frankly, anyone breathing air and living on this planet want to know which corporations are just giving lip service and which are genuinely making strides toward a greener future.
While this legislation seems state-centric, Lynn LoPucki, a law expert from the University of Florida, broke it down for us: it’s actually a national initiative. Given California’s economic heft and influence, almost every significant company that trades in the state will be forced to come clean about their emissions. The logic is simple and clear: Once companies start reporting their emissions transparently, they’ll be more inclined to reduce them. Because guess what? Investors, consumers, and, well, the world, are watching.
Cheers to the Golden State for taking a giant leap toward a greener, cleaner future! If you ask us, that’s the kind of gold rush we can get behind.
