Newsom signs landmark emissions, climate risk disclosure laws

California Gov. Gavin Newsom (D) signed off on a pair of rules that will require large corporations that do business in the Golden State to disclose their greenhouse gas emissions and climate-related risk.

The two bills, which were among a laundry list of legislation approved this weekend, are the Climate Corporate Data Accountability Act, or SB-253, and the Climate-Related Financial Risk bill, or SB-261.

SB-253 will require all public and private firms that operate in California — and whose annual revenues surpass $1 billion — to disclose both direct and indirect greenhouse gas emissions.

If companies fail to adhere to the demands of the law, they will face fines of up to $500,000 a year, according to the bill.

“This policy, once again, demonstrates California’s continued leadership with bold responses to the climate crisis, turning information transparency into climate action,” Newsom wrote in a signing message distributed to the state Senate.

The governor acknowledged, however, that the timeline set in the bill may not be feasible — and that he would therefore direct his administration to work with the bill’s author and the Legislature to address this concern.

SB-261, meanwhile, will require companies that generate more than $500 million in annual revenue to publish climate-related financial risk reports biennially, beginning in 2026.

Failure to comply with SB-261 will result in administrative penalties of up to $50,000 in a reporting year.

“This policy will illustrate the real risks of climate change for businesses operating in California and will encourage them to adopt practices that seek to minimize and avoid these risks,” Newsom said in another signing message.

Similar to his instructions regarding SB-253, the governor said that he would be advising his administration to work on deadline issues associated with this bill as well. 

While the two bills have garnered widespread support among environmental organizations, industry leaders have opposed their enactment.

California Chamber of Commerce President and CEO Jennifer Barrera expressed her organization’s disappointment in the bills’ signing in a Saturday statement released on X, the platform formerly known as Twitter.

Barrera criticized the legislation for introducing “major changes in climate policy,” stressing that these shifts “will add considerable obligations on affected businesses.”

“We looked forward to working with the governor’s office on SB-253 clean-up legislation that will address some of the major conners of our members, particularly the impact on small business,” she added.

California’s new emissions law notably reaches beyond federal rules proposed by the U.S. Securities and Exchange Commission.

Those regulations would require publicly traded companies to disclose both direct and indirect emissions, while the California legislation includes private corporations as well.

Among the other climate-related laws signed this weekend were a bill requiring the owners of abandoned oil and gas wells to pay for their closure, legislation opening highways for solar power construction and plans to prepare California’s ports for offshore wind development.

“With today’s action, Gov. Newsom cements California’s climate leadership,” Laura Deehan, state director of Environment California, said in a statement.

“As one of the biggest economies in the world, what we do here matters beyond our borders,” Deehan added.