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California Governor Newsom to Sign Emissions Reporting Bill for Large Companies

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California Governor Newsom to Sign Bill Requiring Large Companies to Report Emissions

California Governor Gavin Newsom has announced his intention to sign a bill that will mandate large businesses to disclose their carbon emissions, including scope 3 or supply chain emissions. The bill, known as SB253, was passed by state lawmakers last week and will apply to businesses in California with annual revenues exceeding one billion dollars. This requirement will affect over 5,300 businesses, including multinational corporations and globally recognized companies.

Leading the Way in Corporate Carbon Accounting

With the signing of SB253, California will become the first location in the United States to enforce corporate carbon accounting. This move aligns with ongoing discussions at the Securities and Exchange Commission (SEC) regarding the regulation of corporate climate disclosures. Notably, the SEC has yet to confirm whether scope 3 emissions, which originate from a company's suppliers and often constitute the largest portion of emissions, will be included. Scope 1 emissions stem from a company's operations, while scope 2 measures emissions from purchased energy sources.

California's Climate Leadership

Governor Newsom emphasized California's longstanding commitment to climate issues and its reputation as a hub for innovation and entrepreneurship. The state has been at the forefront of regulating tailpipe emissions and implementing low-carbon fuel standards, setting an example for the nation. Newsom expressed gratitude towards large businesses like Apple and Salesforce, which have shown support for the climate disclosure regulations. He acknowledged their forward-thinking approach and willingness to align with the state's climate goals. Governor Newsom did mention a "modest caveat" before signing the bill, stating that his office needed to address certain language within the legislation. However, his overall endorsement of SB253 underscores California's dedication to environmental sustainability and its proactive stance on combating climate change.


The signing of bill SB253 by California Governor Gavin Newsom marks a significant shift in corporate accountability for carbon emissions. This legislation could have profound implications for new businesses, particularly those with high revenue or supply chain emissions.

Implications for New Businesses

New businesses, especially those aiming to reach the billion-dollar revenue mark, will need to consider their carbon emissions as part of their operational strategy. This includes not only direct emissions but also those from their supply chains. This requirement could lead to increased scrutiny of business practices and potential changes in supplier relationships.
Future Considerations
While the bill presents challenges, it also offers opportunities. Businesses that can demonstrate a commitment to reducing their carbon footprint may gain a competitive advantage, attracting environmentally conscious consumers and investors. Furthermore, the move towards transparency in carbon emissions could spur innovation in low-emission technologies and practices. In conclusion, the signing of SB253 represents a "hot take" on the intersection of business and environmental sustainability. While it introduces new challenges for businesses, it also opens up opportunities for innovation and market differentiation. New businesses should view this as a call to action to incorporate sustainability into their core strategies.
Story First Published at: https://www.cnbc.com/2023/09/18/california-governor-newsom-will-sign-emissions-reporting-bill.html
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