As California strains under severe weather, oil companies and industry reps are fighting against legislation that would require large companies to fully disclose carbon emissions across their value chain.
A vehicle drives through a flooded road as Tropical Storm Hilary moves through the area on August 20, 2023 in Palm Springs, California. (Mario Tama / Getty Images)
One of the nation’s most important climate fights is currently playing out under the radar in California, where state residents are weathering an unprecedented tropical storm. Oil and industry lobbying groups are spending millions in a last-ditch attempt to block first-of-its-kind legislation that would require thousands of large companies doing business in the state to fully disclose their carbon emissions, a move that would effectively set national policy.
In the final weeks of California’s legislative session, which ends in mid-September, State Assembly members are expected to vote on the climate transparency bill. With a federal version of the measure still delayed — and nearly certain to face lengthy legal challenges from industry — California’s legislation could expedite a public reckoning over corporations’ true contributions to climate change.
The bill has already passed the State Senate, and if it survives a secretive appropriations hearing later this month, it will go before the full Assembly — where a previous version failed by just four votes last year following a fierce opposition campaign.
Democratic California governor Gavin Newsom, who has been burnishing his climate credentials for a possible presidential run, has yet to weigh in on this year’s climate proposals in his state. A spokesperson told us that the governor plans to evaluate the bill if it reaches his desk.
So far this year, industry opponents have reported spending more than $7 million on state lobbying efforts that included attempting to influence or nix the climate disclosure bill, according to our review of state records. Those opponents include gas and oil companies, which spent more than $1 million, as well as a host of less well-known climate culprits.
Eight cement and asphalt companies, whose carbon-intensive production processes are responsible for more global emissions than airline travel, together spent nearly $150,000 on lobbying during the first half of this year.
Airlines are also lobbying heavily on the bill, as are a laundry list of household brands including almond company Blue Diamond Growers, Coca-Cola, Costco, In-N-Out Burger, Pepsi, Rite Aid, and Walmart. If the measure passes, all of those companies will be required, for the first time, to calculate the carbon emissions that occur across their value chain — not just those involved directly in their day-to-day operations. Such indirect emissions can account for nearly 90 percent of a company’s total carbon footprint.
Most of the same corporations fighting the bill have already set “net-zero commitments” — or “aspirations,” in the parlance of major oil companies — to dramatically cut their carbon emissions in the coming decades. But thanks to fuzzy definitions and accounting sleights of hand, such voluntary corporate commitments are frequently “mere blather,” according to Michael Gerrard, the founder of Columbia University’s Sabin Center for Climate Change Law.
Take Chevron, which has spent $150,000 this year on lobbying, including against the disclosure bill and related legislation. The oil and gas giant’s “2050 net-zero aspiration” depends on “canceling out” emissions through the purchase of so-called carbon offsets that supposedly subsidize climate-friendly projects elsewhere. But a recent report concluded that more than 90 percent of those offsets should be “presumed ‘junk’ until proven otherwise.”
“We are awash in greenwashing,” Gerrard said. “We need standards to set forth what a legitimate net-zero commitment is.”
As Goes California
More than a year ago, the federal Securities and Exchange Commission (SEC) proposed rules requiring public companies to disclose climate risks to their bottom line, a category that encompasses everything from manufacturing facilities in flood-prone areas to oil holdings that could drop in value as the energy transition proceeds.
The SEC proposal stops well short of rules already on the books in the European Union, which require companies to report the risks that their business models pose to the broader environment, not just investors. But that approach hasn’t stopped the GOP from attacking the proposed rule as part of its broader war against sustainable investing and SEC chair Gary Gensler for his role in the proposal.
This month, more than eighty congressional Democrats sent a letter to Gensler urging him to enact the new climate reporting requirements as quickly as possible. A final rule could come this fall, but the agency is reportedly mulling watering down its requirements. The draft rule drew a record-breaking fourteen thousand comments and widespread pushback from business lobbying groups like the US Chamber of Commerce.
As its parent organization fights to kill federal rules, the California Chamber of Commerce has led opposition to state climate disclosure legislation on the grounds that it is “premature” while those federal rules are pending.
The state’s Chamber of Commerce donated nearly $1.4 million to candidates for state legislature last year. Defeating the climate disclosure bill, introduced in January by State Senator Scott Wiener, a Democrat, is one of the group’s top priorities this session.
Last year, the bill fell just four votes short of passage when corporate Democrats joined with Republicans to block it on the Assembly floor. Fourteen of the current Democratic Assembly members who abstained or voted “no” last August have received a total of $327,000 from gas and oil interests during the last election cycle, according to data from the National Institute for Money in Politics.
Three of those Democrats — Assemblymembers Joaquin Arambula, David Alvarez, and Jacqui Irwin — changed their “yes” votes to abstentions at the last minute, helping ensure the bill’s defeat.
Asked by us about how he plans to vote this year, a spokesperson for Arambula said that he was studying the bill. Alvarez and Irwin did not respond to requests for comment.
“We feel pretty confident that we have a path to passing it,” said Melissa Romero, senior legislative manager for California Environmental Voters, a key backer of the plan. “But our opposition is stacked with the most influential moneyed interests in the state.”
Wiener’s bill would apply to more than 5,300 large companies doing business in the state, regardless of whether they’re publicly traded, effectively setting new nationwide standards.
Nothing in the new measures, should they pass, requires companies to actually reduce their emissions — just to calculate and disclose them. But past environmental regulations, including those governing the release of toxic chemicals, show that mandatory disclosure is an important first step toward fast and efficient decarbonization, according to Columbia University’s Gerrard.
“It’s a very important part of the toolbox,” he said. “I have very little sympathy for the companies that are complaining about the burdens of this kind of disclosure. These are orders of magnitude lower than the burdens that climate change itself is imposing.”
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