Business Groups File Suit Against California Law Requiring Climate Disclosures

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Will Kessler Contributor
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A coalition of business interest groups filed a lawsuit on Tuesday seeking to overturn a California law that would mandate thousands of companies report their greenhouse gas emissions.

The lawsuit was filed by the U.S. Chamber of Commerce and the American Farm Bureau Federation, along with four groups in California, alleging that the mandate constitutes compelled speech, violating the First Amendment of the Constitution. Democratic California Gov. Gavin Newsom signed the law in October 2023, which requires that businesses in the state with at least $1 billion in annual revenue calculate and disclose emissions due to operations, as well as emissions produced by both suppliers and customers using any products. (RELATED: Dems’ Energy Permitting Reform Bill Includes Billions For Eco-Activist Groups)

“We are proud of the leadership and innovation shown by America’s businesses in tackling climate change,” Tom Quaadman, executive director of the Chamber of Commerce’s Center for Capital Markets Competitiveness, said in a press release. “Businesses and government need to work together to address the problem and that requires policies that are practical, flexible, predictable, and durable. California’s corporate disclosure laws are the opposite of that and violate the First Amendment by forcing businesses to engage in subjective speech.”

The groups are asking the court to enjoin the California Air Resources Board from carrying out the state’s plan to implement the legislation, according to the court document.

California’s state air-quality board is expected to implement the law for businesses by 2025, with companies starting to disclose their emissions over the following two years, according to The Wall Street Journal.

The European Union is looking to implement similar requirements as California, forcing companies to report their greenhouse gas outputs if they wish to operate in the area, according to the WSJ. The Securities and Exchange Commission is also working on a proposal requiring companies that are publicly traded to disclose climate-related information in their security filings.

“To make matters worse, these laws demand that both public and private businesses with even minimal operations in the state calculate their greenhouse gas emissions from their whole supply chain, no matter where those emissions take place, and subjectively measure and report their worldwide climate-related financial risks and proposed mitigation strategies to California,” Quadmaan said in the press release. “The costs and compliance issues of this law will be felt by businesses of all sizes, but especially small, Main Street businesses.”

Newsom’s office did not immediately respond to a request for comment from the Daily Caller News Foundation.

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