California is about to sign off on a deal to become the first US state requiring large companies to report their carbon emissions. This will affect around 5,400 firms which make more than $1bn in annual revenue.
Considering filling out tax forms for the prior year proves too difficult a task for certain businesses, it’s safe to say a mandate to report annual energy usage and carbon emission outlays will not be welcomed by all.
It’s coming regardless, though, so suck it up.
The California Climate Corporate Data Accountability Act, which was passed on September 12th, will ensure that the golden state becomes the first in the US to require companies be completely transparent about their carbon footprints.
Hot off the presses, the new legislation will start to be enforced in 2026 and will affect roughly 5,400 of California’s corporate firms (both public and private) making upwards of $1bn in revenue per year.
How exactly this disclosure will be standardised and enforced, we don’t know. What’s been made abundantly clear, however, is that civil penalties will be brought to those in violation of the act with fines potentially reaching up to $500,000. Ouch.
Initially, companies will be expected to accurately calculate and present data on ‘scope 1’ emissions, which refers to those directly created by the outfit in question.