Under the terms of a new law that was just passed in California on Monday, major firms like Apple and Disney will be required to reveal their annual carbon emissions.
The state assembly voted in favor of the bill, and Governor Gavin Newsom has already signed it into law.
The bill mandates that businesses with yearly revenue of more than $1 billion (or 817 million pounds) must report their greenhouse gas emissions. At the federal level, similar activities are moving forward in a glacially slow manner.
Mr. Newsom applauded the intentions of the law but questioned its constitutionality.
In a signing statement, Mr. Newsom remarked that "this important policy once again demonstrates California's continued climate crisis leadership." "However, the implementation timelines in this bill are likely infeasible."
In addition, he mentioned that he is concerned about the overall financial impact that this bill will have on businesses.
According to the law, the California Air Resources Board has until January 1, 2025, which is a little over a year from now, to put in place a system that will allow for the reporting of emissions.
Large companies are coming under increasing amounts of pressure to come clean about the amount of heat-trapping gasses they spew into the atmosphere, both directly as a result of their activities and indirectly as a result of their purchasing of things like power.
The need to address climate change is becoming more urgent by the day.
Numerous multibillion dollar corporations call the state of California, which has a history of being a leader in the development of progressive environmental legislation, home.
The state is home to the headquarters of several major corporations, including Chevron, Meta, Wells Fargo, Intel, and HP, which collectively generate annual revenues of more than $50 billion.
In addition, the state just recently approved a rule that requires businesses with annual revenues of more than $500 million (or £408 million) to report their climate-related financial risks.
Mr. Newsom stated that this law will motivate businesses to strive toward avoiding those risks. However, in a signing statement he voiced additional concerns about the impact the prices will have on businesses.
Since the beginning of this year, the Securities and Exchange Commission (SEC), which is in charge of regulating stocks and markets in the United States, has been working on comparable federal standards that would require businesses to report emissions and climate-related risks.
Greenwashing is when a corporation overstates its activities on the environment in its marketing.
Supporters of the commission's proposed rule, such as Senator Elizabeth Warren, claim that it would prevent "greenwashing" and that it would assist investors understand the vulnerabilities of various companies.
However, according to the Chamber of Commerce, which is the largest business group in the country, the rule may be difficult to implement and expensive for businesses to comply with.
The organization has also questioned whether or not reporting on risks and emissions are important to decisions regarding investments, as well as whether or not a regulator of markets should be responsible for carrying out environmental rules.
There is no indication as to when the commission will decide to adopt the final version of the rule.
