California Companies Call for Full Funding for Historic Climate Disclosure Laws

April 29, 2024 /3BL/ - Leading businesses today called on California lawmakers and Gov. Gavin Newsom to fully fund the implementation of the state’s landmark corporate climate disclosure legislation.

Passed in 2023 with significant company and investor support, SB 253 and SB 261 – collectively referred to as the Climate Accountability Package – are historic risk management and corporate transparency measures. Once they are implemented, large public and private companies that do business in California will begin reporting their impacts on climate change throughout their supply and value chains, as well as the steps they are taking to prepare their businesses for the risks of climate change.

However, the implementation of the two laws has not yet been funded. In a letter to the governor and legislative leaders, 35 businesses called for full funding to be included in the final 2024-2025 state budget.

“We respectfully urge you to secure full funding for the on-time implementation of SB 253 and SB 261, as enacted into law, in the final 2024-2025 state budget. Not only do investors, consumers, and other stakeholders deserve better information about companies' climate-related financial risks, but businesses themselves will benefit from the standardized and consistent disclosure guidance that these policies promise,” the letter said.

Signatories to the letter include Akamai Technologies, Avocado Green Brands, Dignity Health, DSM, Everlane, Patagonia, REI Co-op, among others. It was organized by the sustainability nonprofit Ceres, a long-time supporter of corporate climate disclosure that strongly advocated for the California policies throughout 2023.

“Patagonia has been voluntarily measuring our carbon emissions, including our Scope 3, since 2015,” said Patagonia CEO Ryan Gellert. “By measuring this—because we understand the damage we inflict on nature—we are taking responsibility and radically cutting our pollution by transforming how we make products and work with our supply chain partners. All companies should be held accountable for their contributions to the climate crisis, and this legislation will help because finding solutions requires transparency and consistent, reliable data.”

“At Everlane, we are committed to leaving the fashion industry cleaner than we found it in 2011 when we launched our first product. We understand that this is not something we can do alone, so we’re dedicated to measuring and disclosing our impacts, goals, and progress, and supporting key legislation that will help move our industry (and others) forward. We recently released our 2023 Impact Report, and are proud to announce that we have achieved a 38% absolute reduction across Scope 1-3 emissions compared to our 2019 baseline, which equates to a 24% decrease in Scope 3 per-product emissions,” said Katina Boutis, director of sustainability, Everlane. “While we are proud of our accomplishments, we need all companies to take bold action and accountability on climate change mitigation efforts—we believe that transparent disclosure is a necessary step to hold companies accountable to achieve necessary greenhouse gas reductions. We fully support the timely implementation of and budget allocation for SB253 and SB261, and urge our legislators to prioritize interoperability across leading disclosure frameworks.”

As investors, consumers, and others seek more information about corporate climate risk, the implementation of the California legislation is especially urgent because the U.S. Securities & Exchange Commission’s climate disclosure rule is delayed by litigation.

“California last year proved its leadership by passing the nation’s first-ever climate disclosure policy, which will reduce risks to the state and national economy by providing unprecedented insight into how companies are managing the vast financial threats posed by the climate crisis,” said Steven Rothstein, managing director of the Ceres Accelerator for Sustainable Capital Markets. “Today, the call from leading businesses is clear: California must not delay in delivering these needed insights for investors, consumers, businesses, and other stakeholders. Now is the time to fully fund the implementation of SB 253 and SB 261.”

Ceres is a nonprofit advocacy organization working to accelerate the transition to a cleaner, more just, and sustainable world. United under a shared vision, our powerful networks of investors and companies are proving sustainability is the bottom line — changing markets and sectors from the inside out. For more information, visit ceres.org.

Media Contact: Helen Booth-Tobin, [email protected]