New California law requires large businesses to disclose GHG emissions
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California governor Gavin Newsom has signed off on landmark legislation that will require companies with annual revenues of over $1 billion to disclose their global CO2 emissions, including Scope 3. Under the new law, the state’s Air Resources Board has to approve rules by 2025 to implement the legislation.
Over 5,300 firms that operate in the state and make more than $1 billion in annual revenues will now have to report both their direct and indirect emissions. If it were a country, it would be the fifth largest in the world. Major corporations, including Patagonia, IKEA, Everlane, and Eileen Fisher, publicly supported the bill which requires them to disclose their Scope 1 and 2 emissions from 2026, followed by Scope 3 emissions in 2027.
Companies have to start annual disclosures of their direct emissions, as well as those used to power, heat, and cool their facilities by 2026. By 2027, they have to start annually reporting other indirect emissions. The state plans to lower its greenhouse gas emissions by 40 percent below the 1990 level by 2030.
