A handful of bills before the California legislature signify growing interest in businesses making money in the world’s fifth-largest economy and how their operations contribute to emissions that exacerbate climate change.
California politicians want to demand well-known brands like
Some bills also want companies to look at their financial risk from climate change related to assets, weather events, new laws and other regulations that could be passed to reduce risk. At least one of the bills would be the first of its kind in the country if it became law.
“It’s good that there are several members working in this space. It’s powerful, ”said Senator Scott Wiener (D), author of one of the bills, the Climate Corporation Accountability Act.
Representatives of Apple, Walt Disney,
The California Chamber of Commerce, which has not placed any of the bills on its list of laws it supports or opposes, did not immediately respond to a request for comment. The California Business Roundtable, which said in January that Wiener’s bill would increase the cost of doing business in California, also did not respond.
Bill de Wiener, SB 260, would require public emissions disclosures from companies doing business in California with annual sales of over $ 1 billion.
The disclosures would include carbon emissions from power and electricity at company facilities, as well as indirect emissions at non-core functions along the supply chain. Companies should also set science-based reduction targets. More than 5,000 companies, including
“You can’t just regulate California’s emissions and protect California and its people from the ravages of climate change, because greenhouse gas emissions know no borders,” said Catherine Atkin, co-director of Carbon Accountable , one of the sponsors of SB 260. “If you benefit from the generosity of California as a market, you have to be a responsible player.”
Other bills address the financial risks associated with forest fires, erosion, extreme weather conditions, sea level rise and other climatic effects.
SB 449 by Senator Henry Stern would require banks, corporations, credit unions, real estate investment trusts, mortgage lenders and other related businesses to prepare and publish reports on climate-related financial risks online. The governor should also create a working group on financial risks related to climate change by 2023 to assess the risks these entities face.
Assembly member Jesse Gabriel (D) modeled his bill, AB 766, off the Climate Risk Disclosure Act of 2019 from U.S. Senator Elizabeth’s Warren (D-Mass.). About 360 companies and businesses would be affected.
Gabriel’s bill would direct the California Air Resources Board to create reporting rules for the disclosure of direct and indirect greenhouse gas emissions, establish a social cost of the carbon metric, and require analysis climate scenarios. Reporting would begin in 2025, as companies with fossil fuel assets face additional requirements.
The rule would apply to public companies with executive offices in California and annual revenues of more than $ 100 million. The state would also be required to assess climate risk when issuing bonds.
“There are extreme risks to our financial system,” Gabriel said. “Our feeling is that it is not captured correctly.”
Federation of Legsilation
Washington is paying attention to the matter.
Representative Nydia Velazquez (DN.Y.) presented on March 10 a bill (HR 1`780) which would order the Securities and Exchange Commission to require public companies to disclose in their annual reports to shareholders the measures taken to meet the greenhouse gas emissions targets set out in the Agreement. Bets on the climate.
Paris Agreement disclosures Act would create standardized reports and help encourage investors to look at climate action when investing, his office said in a press release.
The Institute for Policy Integrity at the New York University School of Law and the Environmental Defense Fund published a report in February, saying the SEC should mandate climate risk disclosure rather than relying on existing voluntary reporting.
The report cited another study which found that 215 of the world’s largest companies have a combined potential of $ 1 trillion in climate risk over the next five years.
California bills are unique and states can lead the SEC’s action, particularly in terms of requiring emissions reductions, said Sarah Ladin, attorney at the Institute for Policy Integrity who contributed to the drafting. of the study.
“I think states have a role to play in determining what to do once this information has been provided,” she said.
California and New York tend to be leaders in this area, Ladin said. The New York Civil Service Commission began in October to review demanding investor-owned utilities to disclose the risks climate change poses to businesses, investors and customers.
A spokesperson for the agency did not immediately respond to questions about the state’s position in the process.
“ They have a responsibility ”
Larger companies can pollute on a larger scale, forcing them to be more responsible, supporters of the bill say.
A 2020 climate responsibility institute report found that between 1965 and 2018, the world’s 20 largest oil, coal and gas companies emitted 493 billion tonnes of carbon dioxide and methane, or 35% of all emissions from fossil fuel and gas operations. cement since 1965. Third in this regard worldwide list: Chevron USA based in San Ramon, California.
“These biggest companies are the ones that create a global economy,” Atkin said. “They have a responsibility to reduce greenhouse gas emissions for the benefit of the world, but also of California.”
Two of the bills provide for committee hearings in April. Gabriel said he sees his bill, which is awaiting a hearing date, as an example of push policy and a starting point.
“We know it’s a hot topic and it’s a way for California to energize it,” he said. “The intention is that these companies face their choices.”