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) “Covered entity” means a publicly traded domestic corporation or a publicly traded foreign corporation with annual revenues in excess of one billion dollars ($1,000,000,000) that does business in California.
(2) “Science-based emissions target” means a greenhouse gas (GHG) emissions reduction target that is in line with the scale of reductions required to keep
global warming at or below 1.5°C above preindustrial levels, and includes scope 1 emissions, scope 2 emissions, and scope 3 emissions.
(3) “Scope 1 emissions” means all direct greenhouse gas emissions that stem from sources that a covered entity owns or directly controls, including, but not limited to, fuel combustion activities.
(4) “Scope 2 emissions” means indirect greenhouse gas emissions from electricity purchased and used by a covered entity.
(5) “Scope 3 emissions” means indirect greenhouse gas emissions, other than scope 2 emissions, from activities of a covered entity that stem from sources that the covered entity does not own or directly control and may include, but are not limited to, emissions associated with the covered entity’s supply chain, business travel, employee commutes, procurement, waste, and
water usage.
(c) On or before January 1, 2023, the state board shall develop and adopt regulations to require a covered entity to verify and annually report to the state board all of the covered 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, both of the following:
(1) That a covered entity, on or before January 1, 2024, and annually thereafter, publicly disclose all of the covered entity’s scope 1 emissions, scope 2 emissions, and scope 3 emissions for the prior calendar year in a manner that is easily understandable and accessible to residents of the state, including, but not limited to, by making that information available on a widely available digital platform. The public disclosure shall include the name of the covered entity and any fictitious
names, trade names, assumed names, and logos used by the covered entity.
(2) That a covered entity’s public disclosure pursuant to this subdivision is independently verified by a third-party auditor, approved by the state board, with expertise in greenhouse gas emissions accounting. The covered entity shall ensure that a copy of the complete, audited greenhouse gas emissions inventory for the prior calendar year, including the name of the approved third-party auditor, is provided to the state board as part of or in connection with the covered entity’s public disclosure pursuant to this subdivision.
(d) On or before January 1, 2024, the state board shall develop and adopt regulations to require a covered entity to set a science-based emissions target, based on the entity’s emissions that have been reported to the state board pursuant to subdivision (c). The state board shall
ensure that the regulations adopted pursuant to this subdivision require, at a minimum, both of the following:
(1) That a covered entity, on or before January 1, 2025, and annually thereafter, publicly disclose the science-based emissions target the covered entity has set for its emissions in a manner that is easily understandable and accessible to residents of the state, including, but not limited to, by making that information available on a widely available digital platform.
(2) That a covered entity’s science-based emissions target is independently verified by a third-party auditor, approved by the state board, with expertise in greenhouse gas emissions accounting. The covered entity shall ensure that a copy of the complete, audited science-based emissions target, including the name of the approved third-party auditor, is provided to the state board as part of or in connection
with the covered entity’s public disclosure pursuant to this subdivision.
(e) In developing regulations pursuant to this section, the state board shall consult with a panel of experts, which shall include, but not necessarily be limited to, experts in climate science and corporate carbon emissions accounting, implementing state agency representatives, stakeholders representing consumer interests, and covered entities that are leaders in collecting, reporting, and setting targets for the reduction of their own carbon footprint, to develop standards and protocols for the state board to utilize to do both of the following:
(1) Collect data for all scope 3 emissions from a covered entity.
(2) Set a science-based emissions target for a covered entity.