38532.
(a) This section shall be known, and may be cited, as the Climate Corporate Accountability Act. (b) For purposes of this section, the following terms have the following definitions:
(1) “Reporting entity” means a partnership, corporation, limited liability company, or other business entity formed under the laws of this state, the laws of any other state of the United States or the District of Columbia, or under an act of the Congress of the United States with total annual revenues in excess of one billion dollars ($1,000,000,000) and that does business in California.
(2) “Scope 1 emissions” means all direct greenhouse gas emissions that stem from sources that a reporting entity owns or directly controls, regardless of location, including, but not limited to, fuel combustion activities.
(3) “Scope 2 emissions” means indirect greenhouse gas emissions from electricity purchased and used by a reporting entity, regardless of location.
(4) “Scope 3 emissions” means indirect greenhouse gas emissions, other than scope 2 emissions, from activities of a reporting entity that stem from sources that the reporting entity does not own or directly control and may include, but are not limited to, emissions associated with the reporting entity’s supply chain, business travel, employee commutes,
procurement, waste, and water usage, regardless of location.
(c) (1) On or before January 1, 2024, the state board shall develop and adopt regulations to require a reporting entity to annually disclose to the Secretary of State, and verify, all of the reporting entity’s scope 1 emissions, scope 2 emissions, and scope 3 emissions. The state board shall ensure that the regulations adopted pursuant to this subdivision require, at a minimum, all of the following:
(A) (i) That a reporting entity, starting in 2025 on or by a date to be determined by the state board, and annually
thereafter on or by that date, publicly disclose to the Secretary of State all of the reporting entity’s scope 1 emissions, scope 2 emissions, and scope 3 emissions emissions and scope 2 emissions for the prior calendar year year, and its scope 3 emissions for that same calendar year no later than 180 days after that date, using the Greenhouse Gas Protocol standards and guidance
Corporate Accounting and Reporting Standard and the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard developed by the World Resources Institute and the World Business Council for Sustainable Development, including guidance for scope 3 emissions calculations that detail acceptable modeling and statistical analysis when scope 3 emissions data from nonreporting entities is unavailable or not feasible.
use of both primary and secondary data sources, including the use of industry average data, proxy data, and other generic data in its scope 3 emissions calculations.
(ii) On or before January 1, 2029, the state board shall review, and update as necessary, the public disclosure deadlines established pursuant to clause (i) to evaluate trends in scope 3 emissions reporting and consider changes to the disclosure deadlines to ensure that scope 3 emissions data is disclosed to the Secretary of State as close in time as practicable to the deadline for reporting entities to disclose scope 1 emissions and scope 2 emissions data.
(B) That a reporting entity’s public disclosure is made in a manner that is easily understandable
and accessible to residents of the state.
(C) That a reporting entity’s public disclosure includes the name of the reporting entity and any fictitious names, trade names, assumed names, and logos used by the reporting entity.
(D) That a reporting entity’s public disclosure is independently verified by a third-party auditor, approved by the state board, with expertise in greenhouse gas emissions accounting. The reporting entity shall ensure that a copy of the complete, audited greenhouse gas emissions inventory for the prior calendar year,
inventory, including the name of the approved third-party auditor, is provided to the Secretary of State as part of or in connection with the reporting entity’s public disclosure.
(2) The state board may adopt or update any other regulations that it deems necessary and appropriate to implement this subdivision.
(3) In developing the regulations required pursuant to this subdivision, the state board shall consult with all of the following:
(A) The Secretary of State.
(B) The Attorney General.
(B)
(C) Other government stakeholders, including, but not limited to, experts in climate science and corporate carbon emissions accounting.
(C)
(D) Stakeholders representing consumer and environmental justice interests.
(D)
(E) Reporting entities that have demonstrated leadership in collecting information and reporting on and setting targets for the reduction of their own carbon footprints. full-scope greenhouse gas emissions accounting and public disclosure and greenhouse gas emissions reductions.
(d) (1) On or before July 1, 2026, the state board shall prepare a report on the public disclosures made by reporting entities to the Secretary of State under pursuant to subdivision (c) and the
regulations adopted by the state board pursuant to subdivision (c). The report shall include, but is not limited to, all of the following information and analyses:
that subdivision. In preparing the report, the state board shall consider, at a minimum, greenhouse gas emissions from reporting entities in the context of state greenhouse gas emissions reduction and climate goals. The state board, in preparing its report, shall not require reporting entities to report any information beyond what is required pursuant to subdivision (c) or the regulations adopted by the state board pursuant to that subdivision.
(A)(i)The best reasonable estimate of the required annual aggregated greenhouse gas emissions levels of reporting entities that would be necessary to maintain global temperatures within 1.5 degrees Celsius of preindustrial levels.
(ii)In preparing the estimate required pursuant to this
subparagraph, the state board shall consider the most current protocols and guidance of the Science Based Targets initiative (SBTi) as they pertain to required emissions reductions from businesses and, in line with those protocols and guidance, exclude avoided emissions and offsets as counting towards a reporting entity’s emissions reduction goals.
(B)(i)The best reasonable estimate of projected greenhouse gas emissions from reporting entities based on successful implementation of the state’s existing greenhouse gas emissions reduction, clean energy, and other similar regulations to which reporting entities are subject.
(ii)The estimate required pursuant to this
subparagraph shall, at a
minimum, include an estimate of the projected greenhouse gas emissions from reporting entities for the calendar years 2030 and 2045.
(C)Recommendations, based on the emissions reports required to be submitted by reporting entities to the Secretary of State under the regulations adopted by the state board pursuant to subdivision (c), that reporting entities may consider to effectively reduce their remaining emissions in line with what is recommended by the SBTi to maintain global temperatures within 1.5 degrees Celsius of preindustrial levels.
(2) The state board shall submit the report required by this subdivision to the Secretary of State to be made publicly
available on the digital platform required to be created by the Secretary of State pursuant to subdivision (e).
(e) (1) (A) The Secretary of State, on or before the date determined by the state board pursuant to clause (i) of subparagraph (A) of paragraph (1) of subdivision (c), shall create a digital
platform, which shall be accessible to the public, that will house all reports disclosures submitted by reporting entities to the Secretary of State under the regulations adopted by the state board pursuant to subdivision (c) and the report prepared by the state board pursuant to subdivision (d). The Secretary of State shall make a report the reporting entities’ disclosures and the state board’s report available on the digital platform within 30 days of receipt of the report.
receipt.
(B) The digital platform shall be capable of featuring individual reporting entity reports, as well as aggregated data, disclosures, and shall allow consumers to view reported data elements aggregated in a variety of ways, including multiyear data, in a manner that is easily understandable and accessible to residents of the state. All data sets and customized views shall be available in electronic format for access and use by the public.
(2) The Secretary of State shall submit, within 30 days of receipt, the
report prepared by the state board pursuant to subdivision (d) to the relevant policy committees of the Legislature.
(f) (1) Section 38580 does not apply to a violation of this section. The
(2) The Secretary of State
State, in consultation with the state board and the Attorney General, shall adopt regulations relating to the enforcement of this section, including the imposition of administrative and civil penalties for violations of this section, which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the Attorney General.
section.
(3) A reporting entity that fails to timely disclose its scope 1 emissions, scope 2 emissions, and scope 3 emissions to the Secretary of State by the deadlines established by the state board pursuant to subdivision (c), or whose public disclosure is incomplete, shall be liable for an administrative penalty of twenty-five thousand dollars ($25,000) per day that the violation continues for the first 30 days and fifty thousand dollars ($50,000) per day that the violation continues thereafter. For purposes of this paragraph, a reporting entity’s public disclosure is incomplete if the disclosure fails to comply with the requirements outlined in subdivision (c) or the regulations adopted by the state board pursuant to that subdivision.
(4) For violations of this section other than those described in paragraph (3), a reporting entity shall be liable for a civil penalty not to exceed one million dollars ($1,000,000) per violation, which civil penalty shall be assessed by the Attorney General and recovered in a civil action brought in the name of the people of the State of California by the Attorney General in a court of competent jurisdiction.
(g) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.