Greenhouse gas emissions disclosure bill fails in California

A California bill that would have required certain companies—including banks—to disclose greenhouse gas emissions will not become law after it failed to garner enough votes for passage in the California State Assembly. The American Bankers Association was among the groups that objected to the legislation, saying it was unworkable because of concerns relating to the availability and usefulness of such information.

Senate Bill 260, the Climate Corporate Accountability Bill, would have required U.S. companies with more than $1 billion in revenue doing business in California to disclose annually audited amounts of direct greenhouse gas emissions (scope 1 emissions), indirect emissions from purchased energy (scope 2) and indirect emissions from activities upstream and downstream in a registrant’s “value chain,” if material (scope 3, which would include “financed emissions” in a bank’s lending portfolio). Given its scope, if passed, the bill would have affected banks outside of California.

ABA along with the California Bankers Association opposed SB 260, highlighting problems banks would have reporting scope 3 emissions, the effect on bank customers and reliance on international reporting standards that are not yet fully developed. In preparation for assembly floor consideration, the two associations led a financial services joint trade groups letter joined by the Securities Industry and Financial Markets Association and the Bank Policy Institute. ABA and CBA also signed broader business community opposition letters led by the California Chamber of Commerce.