Dive Brief:
- The New York State Senate passed a bill Tuesday that seeks to curb greenwashing by asking large businesses to disclose their carbon footprint, laying the foundation for its own corporate climate disclosure law.
- The Climate Corporate Data Accountability Act — or Senate Bill 9072A — requires entities who do business or derive receipts from business activities in the Empire State and generate over $1 billion in revenue in the prior fiscal year to annually disclose their direct and indirect greenhouse gas emissions. This revenue includes, but is not limited to, income received by subsidiaries.
- The bill, which passed the Senate on a 40-22 vote on Feb. 10, complemented eight other pieces of legislation that were greenlit the same day. These include bills that aim to reduce industrial pollution, limit interference with emission control devices, and prohibit the sale of consumer goods containing toxic chemicals.
Dive Insight:
If adopted, the Climate Corporate Accountability Act would require corporate climate-risk disclosures that mirror California’s SB 253, also labeled as the Climate Corporate Data Accountability Act. SB 253 requires business entities operating in California with annual revenues exceeding $1 billion to annually report their greenhouse emissions.
The bill approved this week, sponsored by New York State Sen. Pete Harckham, is the latest version of the proposed law seeking corporate climate disclosures in New York state. A previous iteration was introduced last year and also in 2023.
According to the bill, entities covered by the law must publicly disclose their scope 1 and scope 2 emissions for the prior fiscal year starting in 2028, and scope 3 emissions for the prior fiscal year starting in 2029, and annually thereafter. The bill does not specify precise reporting deadlines for either year and states these dates will be determined later. This timeline offers entities more flexibility compared to the reporting dates suggested in the previous iteration of the bill.
The bill offers certain exceptions for entities incorporated outside of New York. An out-of-state entity would not be considered as doing business in the state if it is only carrying out activities outlined in subsection (b) of section 1301 of the New York Business Corporation Law. These include an entity maintaining or defending an action or proceeding; holding meetings of its directors or shareholders; distributing information to these members; maintaining bank accounts and offices or agencies “only for the transfer, exchange and registration of its securities, or appointing and maintaining trustees or depositaries with relation to its securities.”
Following the bill’s passage in the Senate, it was sent to the New York State Assembly, where a companion bill exists.
“This legislation, building on corporate climate reporting in 37 countries and the state of California, will ensure that investors, employees, customers and others of the largest companies will have the information to understand current resiliency and risks,” Steven Rothstein, chief program officer at environmental nonprofit Ceres, said in emailed comments to ESG Dive.
