Newsom signs first-in-the-nation corporate climate disclosure bills

SACRAMENTO, Calif. — Democratic Gov. Gavin Newsom signed two bills Saturday that would require large corporations operating in the state to disclose both their carbon footprints and their climate-related financial risks starting in 2026.

Background: SB 253, by Sen. Scott Wiener (D-San Francisco), and SB 261, from Sen. Henry Stern (D-Sherman Oaks), are the two most ambitious climate bills to come out of deep-blue California this year.

The laws faced heavy opposition from groups like the California Chamber of Commerce and the Western States Petroleum Association. Both authors amended their bills late in session to delay implementation and roll back corporate penalties for noncompliance. For SB 253 in particular, those amendments led companies like Google and Apple to support the bill and, ultimately, get enough Assembly Democrats on board to land it on Newsom’s desk.

Both bills failed in the Assembly last year.

Context: Taken together, the laws will change the landscape for corporate disclosure. For the first time in the U.S., large publicly traded and privately held corporations doing business in California will need to make public both their impact on the environment, including Scope 3 emissions or those generated through a company’s value chain, and how climate change is impacting their bottom line.

The laws go beyond proposed federal climate disclosure rules, which would only apply to publicly traded companies and wouldn't mandate full Scope 3 disclosure.

What’s next: The laws will now be implemented by the California Air Resources Board, which needs to pass regulations by Jan. 1, 2025, before companies start filing disclosures in 2026.

Newsom has said he thinks the measures will need some “clean up.” CalChamber made similar comments on the need for additional legislation next year, but Wiener has warned that those industry efforts could signal a desire to “gut” SB 253 by removing the Scope 3 reporting requirement.