New California law will require large corporations to reveal carbon emissions by 2026

Large companies doing business in California will have to publicly disclose their annual greenhouse gas emissions in a few years thanks to a groundbreaking law the state passed this month.

Signed by Gov. Gavin Newsom on Oct. 7, SB 253 requires the California Air Resources Board to form transparency rules for companies with yearly revenues exceeding a billion dollars by 2025. The first of its kind law in the U.S. will impact over 5,000 corporations both public and private including Amazon, Apple, Chevron and Walmart.

By 2026, major corporations will also have to report how much carbon their operations and electricity produce and by 2027 disclose emissions made by their supply chains and customers known as "scope 3" emissions.

Shareholders for companies like Exxon Mobil and Chevron have strongly opposed "scope 3" emissions and in May voted against activists' demands for stricter use of them, according to Energy Intelligence. Exxon CEO Darren Woods said meeting those targets while the demand for energy remains will force consumers to "make do with less energy, pay significantly higher prices, or turn to higher-emitting sources."

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Companies with annual revenues that exceed $500 million could face yearly penalties if they don't disclose their climate-related risks early in 2026, due to a companion bill that passed.

The bill's author Sen. Scott Wiener called the disclosures simple yet a power method to drive decarbonization.

"When business leaders, investors, consumers, and analysts have full visibility into large corporations’ carbon emissions, they have the tools and incentives to turbocharge their decarbonization efforts," Wiener said in a news release. "This legislation will support those companies doing their part to tackle the climate crisis and create accountability for those that aren’t."

The measure is a revival of Wiener’s previous SB 260 that passed the Senate last year but was rejected in the Assembly by one vote.

SB 253's passing come as the Securities and Exchange Commission (SEC) finalized a similar federal mandate last month that had been proposed last year, requiring publicly traded companies to disclose their emissions and climate related risks to investors.

Newsom is traveling to China next as part of a weeklong trip to meet with national, subnational and business partners to advance climate action, his office announced Wednesday.

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This article originally appeared on USA TODAY: California will soon require large companies to report carbon emissions