In Short : California’s less-publicized corporate climate law refers to regulatory measures addressing corporate environmental impact within the state. This nuanced legislation likely focuses on reducing carbon footprints, promoting sustainable practices, and aligning businesses with the state’s broader climate goals, offering a more comprehensive perspective on California’s commitment to environmental stewardship.
In Detail : We’ve written a LOT about SB 253, the bill Gov. Gavin Newsom signed in October to require large companies to disclose their greenhouse gas emissions.
We haven’t focused as much on another first-in-the-nation bill he signed to improve the quality of companies’ existing voluntary climate disclosures.
AB 1305, by Assemblymember Jesse Gabriel (D-Encino), is going to require all companies operating in California to publish the number and type of voluntary carbon offsets they buy and sell. They’ll have to disclose whether the offsets are being used to meet corporate net-zero commitments and whether the offsets have been verified by a third party.
Policy wonks and Gabriel alike are saying the bill could juice the Federal Trade Commission’s ability to take action against bogus environmental claims, much in the same way that Sen. Scott Wiener’s (D-San Francisco) SB 253 could make it easier for the Securities and Exchange Commission to require national disclosure of companies’ entire carbon footprints.
Companies posting their carbon-neutrality claims online, as the law requires, will provide the feds with fodder for enforcement under their existing Green Guides rules, which cover corporate environmental marketing claims.
“The FTC could go and look at that, and if it didn’t look like there were enough plans in place or they didn’t provide the protocol that they’re using to estimate carbon emissions, or something like that, that could be a reason for the FTC to open an investigation,” said Mary Engle, the executive vice president of policy at BBB National Programs and the former director of the FTC’s advertising practices division.
One of the reasons we haven’t written about this as much yet, though, is there’s not much in the way of enforcement on the state level.
The law generally puts the state attorney general and local district or city attorneys in charge, with fines of up to $500,000 for noncompliance or inaccurate information.
But it doesn’t even say when it would take effect. Gabriel took the unusual step of writing a clarifying letter to the Assembly clerk last month saying that he wants the law to kick in Jan. 1, 2025. (That’s not binding, though.)
Gabriel said it’s OK.
“I don’t think you need a particularly big stick here to induce compliance,” he told Jordan. “I think a lot of folks are just, because of the nature of their business, going to want to be in compliance with the law because the possibility of enforcement exists.”
The FTC declined to comment.
Another signal this might not go much further within California: While he signed AB 1305, Newsom vetoed another bill in October, SB 390, that would have applied California’s false advertising laws to the carbon offset industry, saying he didn’t want to risk “creating significant turmoil in the market for carbon offsets, potentially even beyond California.”