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California Legislature Passes Most Comprehensive Emissions Reporting Requirements for Large Companies

Major corporations in California will now be required to disclose their direct and indirect greenhouse gas emissions, including emissions from activities such as employee business travel, according to legislation passed by the state’s lawmakers on Monday. This mandate is the most sweeping of its kind in the nation and aims to increase transparency and encourage companies to assess and reduce their emissions. The legislation applies to public and private businesses operating in California that generate more than $1 billion in annual revenue.

The goal of this legislation is to address the climate crisis and hold companies accountable for their emissions. Supporters of the bill, including major companies like Patagonia and Apple, argue that the state is running out of time to take action. Assemblymember Chris Ward, a Democrat, stated that this legislation will help California take a significant step forward in addressing the climate crisis.

Despite gaining support from some major companies and environmental advocates, the bill also faces opposition. Many businesses and groups in the state argue that the legislation will be burdensome and costly. However, if the Senate gives its final approval, the bill will be sent to Governor Gavin Newsom for consideration.

California has been a leader in climate policies, with Governor Newsom pushing for the transition away from gas-powered vehicles and the expansion of renewable energy sources. The state has set a goal to lower its greenhouse gas emissions by 40% below 1990 levels by 2030.

Under this legislation, over 5,300 companies will be required to report their emissions, including both direct emissions and indirect emissions. This differs from other climate disclosure reporting requirements in other states, as California’s bill includes reporting of indirect emissions and is based on a company’s revenue rather than the amount of emissions produced.

Opponents of the bill argue that accurately accounting for all mandated emissions, particularly those that are not directly caused by companies, is not feasible. Business groups, including the California Chamber of Commerce, fear that the legislation could lead to higher prices for consumers and that many companies lack the resources and expertise to accurately report their emissions.

The passage of this legislation is seen as a significant step in California’s efforts to combat climate change and hold companies accountable for their emissions. It remains to be seen whether Governor Newsom will sign the bill into law.

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