California Lawmakers Urge SEC to Follow their Lead in Climate Disclosure Requirements


Summary: California Democratic lawmakers call on SEC Chair Gary Gensler to adopt California’s precedent in requiring companies to disclose detailed greenhouse gas emissions data.

More than two dozen California Democratic lawmakers have written a letter to SEC Chair Gary Gensler, urging him to follow the new California law that mandates companies to disclose their greenhouse gas emissions. The recent California law requires businesses with over $1 billion in annual revenues operating in California to provide detailed disclosure of their scope 1, 2, and 3 emissions. Scope 1 emissions include fuel sources that a business owns, while scope 2 emissions encompass greenhouse gases emitted to generate electricity, steam, heat, or cooling. Scope 3 emissions, which are the largest pool of emissions for most businesses, are generated indirectly from the supply chain. However, some parties, including Exxon Mobil, Walmart, and agricultural organizations, have opposed the inclusion of scope 3 emissions in the SEC’s forthcoming climate disclosure regulation. The California lawmakers are requesting the SEC to include scope 3 disclosure requirements, arguing that consistent and reliable scope 3 data is crucial for investors to evaluate management performance. The lawmakers also emphasize that the cost for businesses to submit the same data to federal regulators is minimal. The SEC has stated that it will review all comments submitted during the open comment period before making a decision. SEC Chair Gary Gensler has highlighted that the agency’s focus is on ensuring the accuracy and effectiveness of their regulations rather than rushing the process.

Tags: California, Democratic lawmakers, SEC, climate disclosure, greenhouse gas emissions