Ceres Applauds California Senate Passage of First-in-the-Nation Climate Risk Disclosure Legislation

May 31, 2023 12:35 PM ET
Campaign: State Policy
California Senate building

Ceres commends the California Senate for voting yesterday to pass two bills that would give investors, consumers, and other stakeholders far more insight into companies’ efforts to address the financial risks of the climate crisis.

The two bills — SB 253 Corporate Climate Data Accountability Act and SB 261 Climate-Related Risk Disclosure Act — would require companies operating in California to report their greenhouse gas emissions from across their supply and value chains and their climate-related risks in line with leading standards that have long been used voluntarily by major businesses. They were respectively sponsored by California Sens. Scott Wiener and Henry Stern.

“Today’s action by the California Senate demonstrates the growing momentum for mandatory climate disclosure,” said Steven Rothstein, managing director for the Ceres Accelerator for Sustainable Capital Markets. “Year after year, California experiences the effects of climate change with greater intensity and devastation. Leading companies recognize this, and they are taking steps to mitigate the financial risks of the climate crisis and take advantage of the economic opportunities in confronting this challenge. These bills will ensure transparency so that investors, consumers, workers and communities know what all major economic actors in the state are doing to minimize relevant risks and drive toward a more just and sustainable future.”

Major companies operating in California — including Avocado Green Brands, Grove Collaborative, REI-Co-op, Seventh Generation, and Sierra Nevada Brewing, among others — have thrown their support behind the two bills. Though many companies already voluntarily disclose emissions, they argue that large-scale disclosure policy levels the playing field by standardizing the process and provides greater insight into the economic risks of economy-wide climate pollution.

The bills would complement the U.S. Securities and Exchange Commission’s proposed rule requiring climate disclosure for public companies, as well as the global standards expected to be finalized this year by the International Sustainability Standards Board. However, because the California bills would apply to both public and private companies over certain revenue thresholds, they would broaden the coverage of companies required to provide information beyond the SEC’s proposed disclosure standards.

“California has an opportunity to set the bar for corporate transparency, disclosure, and risk management,” said Alli Gold Roberts, senior director of state policy at Ceres. “We urge the California State Assembly to seize today's momentum and act quickly to pass both bills.”

About Ceres

Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. Through our powerful networks and global collaborations of investors, companies and nonprofits, we drive action and inspire equitable market-based and policy solutions throughout the economy to build a just and sustainable future. For more information, visit ceres.org and follow @CeresNews.

Media Contact: Helen Booth-Tobin, booth-tobin@ceres.org