California's emissions reporting law sued by business groups

SACRAMENTO, the United States, Jan. 31 (Xinhua) -- A coalition of business groups in the United States sued California Tuesday, seeking to block the state's new corporate emissions reporting laws, the first and most sweeping climate disclosure measures in the nation.

The plaintiffs, including the U.S. Chamber of Commerce, California Chamber of Commerce, American Farm Bureau Federation and other groups, filed the lawsuit in the U.S. District Court for the Central District of California.

The lawsuit challenged the state's bills of S.B. 253 and S.B. 261, both signed by California Governor Gavin Newsom in October 2023.

S.B. 253 requires companies with more than 1 billion U.S. dollars in revenue and doing business in California to file reports on climate-related risks annually beginning in 2026.

S.B. 261 required companies with more than 500 million dollars in annual revenues to report climate-related financial risks on or before Jan. 1, 2026, and biennially after that.

The laws would apply to thousands of large businesses operating in the state, no matter where they are headquartered.

The data these companies must disclose include greenhouse gas emissions released to make products and transport them and indirect emissions such as employee business travel.

The plaintiffs argued both laws violated the U.S. Constitution by compelling speech and conflict with existing federal laws.

They alleged the laws infringed upon the First Amendment, which protects the right to free speech, by requiring companies to make statements on what they call a "politically fraught" topic.

The groups also alleged that the laws "seek to regulate an area that is outside California's jurisdiction and subject to exclusive federal control by virtue of the Clean Air Act," suggesting that it oversteps the federal government's authority to regulate emissions nationwide.

The measures have garnered wide attention and become controversial since they were signed into law.

Proponents said they would increase transparency about how large companies contribute to climate change and help them evaluate how they can reduce their emissions.

But the plaintiffs said in their complaint that the laws "impermissibly compel thousands of businesses to make costly, burdensome, and politically fraught statements" about their operations around the world.

"This will impact companies throughout the country, including those that are primarily based and operate outside the state," said Jennifer Barrera, CEO of the California Chamber of Commerce, in a statement on Tuesday.

"These new climate reporting laws are far from cost-effective and they will not have any notable impact on climate change. Compelling businesses to report inconsistent and inaccurate information unnecessarily places them at risk of enormous penalties," she continued.

California State Senator Scott Wiener, who authored the S.B. 253, called the lawsuit "straight up climate denial."

He said in a statement that "this extremist legal action" reflected large corporations' fear because "they have to tell the public how dramatically they're fueling climate change. They'll no longer be able to mislead the public and investors."