Newsom signs groundbreaking CA climate law, mandates carbon emission reporting for big businesses.
California Becomes First State to Enact Corporate Carbon Emissions Disclosure Program
On October 7, Governor Gavin Newsom signed into law a groundbreaking bill that requires major corporations operating in California to report their greenhouse gas emissions. This move establishes the nation’s first corporate carbon emissions disclosure program.
“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 Scott Wiener, the author of the legislation.
The new law, known as Senate Bill (SB) 253 or the ”Climate Corporate Data Accountability Act,” mandates that corporations with annual revenues exceeding $1 billion publicly disclose their direct and indirect carbon emissions. This includes emissions from employee travel, office air conditioning use, heating, and other activities.
In addition to reporting their own emissions, companies must also disclose the carbon emissions associated with their supply chains in California. They will also be required to pay a fee to the California Air Resources Board (CARB) for filing yearly reports.
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Senator Wiener emphasized the importance of transparency in tackling climate change. He stated, “When corporations are transparent about the full scope of their emissions, they have the tools and incentives to tackle them.”
Governor Newsom also signed a related climate-action measure, Senate Bill (SB) 261, which requires businesses earning over $500 million annually in California to submit a report every two years on their climate-related financial risks.
Both bills will go into effect on January 1, 2026, but the governor expressed concerns about their financial impact and plans to work with the Legislature to modify or streamline the programs.
During the signing ceremony, Governor Newsom reaffirmed California’s commitment to lead the nation in climate action, despite opposition from the California Chamber of Commerce. He stated, “The future happens in California first.”
Support for the legislation came from various businesses, including Apple and Salesforce. IKEA, Patagonia, Sierra Nevada Brewing Co., and Seventh Generation, among others, also backed the bill.
Environmental organizations, such as California Environmental Voters and the Sierra Club, praised the governor’s decision, highlighting the significance of mandatory emissions and risk disclosures in addressing the climate crisis.
While the bills received mostly partisan support, with Republicans voting against them, Governor Newsom’s action marks a significant step forward in corporate accountability for carbon emissions in California.
However, the California Chamber of Commerce expressed disappointment, citing the added obligations and hardships on affected businesses.
With this groundbreaking legislation, California sets a global precedent in corporate accountability and takes a significant step towards a more sustainable future.
Fy the fee structure and ensure that small businesses are not burdened.
How can the fee structure be adjusted to alleviate financial burdens on small businesses?
There are several ways to adjust the fee structure in order to alleviate financial burdens on small businesses:
1. Tailored fee exemptions or reductions: Offer specific exemptions or reduced fees for small businesses based on criteria such as annual revenue, number of employees, or industry sector. This can help alleviate the burden of high fees for businesses that may be operating on tight budgets.
2. Graduated fee structures: Implement a tiered fee structure where fees increase based on the size or revenue of the business. This ensures that smaller businesses pay proportionately lower fees compared to larger corporations, which can better reflect their financial capabilities.
3. Waiving or reducing permit fees: Permit fees can often pose a significant financial burden, especially for small businesses starting or expanding operations. Consider waiving or reducing permit fees, particularly for businesses that are creating jobs or contributing to the local economy.
4. Annual fee reviews: Regularly review and reassess the fee structure to ensure it remains fair and reasonable for small businesses. This allows for adjustments based on economic conditions, cost of services provided, and the financial status of businesses.
5. Payment flexibility: Provide flexible payment options for fees, such as installment plans or extended payment periods, which can help alleviate the immediate financial strain on small businesses.
6. Establish fee caps: Set maximum limits on certain types of fees that disproportionately affect small businesses. This ensures that fees remain within a reasonable range and prevents excessive financial burdens on smaller enterprises.
7. Fee waivers for struggling businesses: During economic downturns or unforeseen crises, consider implementing temporary fee waivers for struggling businesses. This can provide immediate relief when businesses are facing financial hardships.
8. Transparent fee structures: Ensure that fee structures are clear, transparent, and easily accessible to small businesses. This allows businesses to better understand the fees they are required to pay, helping them plan and allocate resources accordingly.
It’s important to strike a balance between providing relief for small businesses while still ensuring enough revenue is generated to support necessary services and infrastructure. Collaboration with small business advocacy groups and stakeholders can help identify the most appropriate adjustments to the fee structure.
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