California Sets Global Precedent on Corporate Accountability

OAKLAND, CA — California continues to lead the way in addressing the climate crisis with the historic signing of Senate Bill 253 (SB 253) and Senate Bill 261 (SB 261). These transformative laws set a new standard for corporate transparency, sustainability, and climate risk disclosure, solidifying California’s role as a global leader in environmental responsibility.

Under the provisions of these laws, corporations will be mandated to publicly disclose their entire carbon footprint, encompassing both direct and indirect carbon emissions, and their climate-related financial risk. The package faced intense opposition from the oil and gas industry, but ultimately passed with support from numerous corporate leaders, including Microsoft, Apple, Google, Levi’s, and Patagonia, among others.

“Mandatory emissions and risk disclosures are a game-changer, not just for our state but for the entire world. They will pave the way for corporations to take meaningful steps towards a more sustainable future and California has once again shown its leadership in addressing the climate crisis,” said Mary Creasman, Chief Executive Officer, California Environmental Voters. “Now our largest corporations will have to measure and publicly disclose their direct and indirect emissions, creating global impacts in our fight to reduce pollution.”

Corporations making over $1 billion annually will have to provide comprehensive information regarding their carbon emissions and those making over $500 million annually must submit annual climate-related financial risk reports to the public. 

Transparency will enable stakeholders to make informed decisions and encourage U.S-based corporations doing business in California to adopt sustainable practices. 

These disclosures will not only benefit California but will also have profound global implications, contributing to the fight against the climate crisis on an international scale.

“California is once again taking a strong global lead on climate action by enacting the strongest — indeed, the first — carbon disclosure requirements in the nation,” said Senator Wiener. “Carbon disclosures are a simple but powerful tool in the fight to tackle climate change. When corporations are transparent about the full scope of their emissions, they have the tools and incentives to tackle them. Thank you, Governor Newsom, for championing climate action and responsible business once again.”

“SB 261 will put our state’s economy on stronger footing by requiring corporations to plan ahead and disclose climate risks that will impact their workers, fenceline communities and the economy as a whole from an ever riskier future,” said Senator Henry Stern. “The signing of our Climate Accountability Package is a stand against other anti-ESG efforts across the country. Thank you Governor Newsom for your climate leadership and pushing corporations to get their heads out of the sand when it comes to climate risk.”

The Governor also signed into law bills on offshore wind (AB 3), to reauthorize transportation funding (AB 126), on community safety and protection (AB 631), to address orphan oil wells (AB 1167), and on land and coastal waters conservation goals (SB 337). His signature is pending for bills on lead testing (AB 249) and water rights (SB 389).

“These laws come against the backdrop of the very catastrophic climate impacts they will address, so we’re eager for the Governor to sign the remainder of the climate and environmental bills sent to his desk alongside the corporate accountability package,” said Creasman. “In order to reach our state goals and protect our most vulnerable communities on the frontlines of the climate crisis, our state leaders will need to prioritize critical policies and  financing our clean energy and resilience transition. Our work isn’t done yet.”

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