Bills would force large companies that do business in the state to report all emissions and crack down on bogus carbon offset claims

Two transparency bills in the California legislature would require corporations to disclose more information about their emissions and their efforts to fight the climate crisis. The oil and gas industry is spending millions to kill them.

The bills would force large companies that do business in California to report all of their emissions and also require firms that buy or sell carbon offsets– which represent a reduction in greenhouse gas emissions – to disclose more information in an effort to crack down on bogus climate claims. Both measures have momentum but could be blocked by moderate Democrats historically aligned with corporate interests.

Since the legislation would make new information available beyond California, the two bills could represent a watershed moment for holding big polluters accountable when they claim climate bonafides, supporters say.

Reporting requirements for corporate emissions are currently fragmented and the climate disclosures bill would be a landmark law pinning down the impacts of some of the world’s largest companies. And as more companies market themselves as partners in the climate fight, greater oversight over voluntary carbon trading markets could help verify their claims.

The carbon offsets bill help with this by requiring information on who is buying and selling credits to be reported publicly.

The Western States Petroleum Association, a trade organization, opposes these bills and has already spent $2.38m on lobbying and advocacy groups this year.

While some oil and gas companies in California have expressed their support for rolling back climate change, industry opposition fits into an agenda of delaying action, said Ryan Schleeter, communications director at the Climate Center.

“Delay is the new denial,” said Schleeter. “Climate denial won’t fly in this state and companies are smart enough to figure that out, so they delay as long as possible and squeeze out as much profit as they can.”

“We can’t improve what we don’t measure”

California lawmakers are evaluating the bills as the climate crisis intensifies around the world. Halfway into 2023, smoke from extreme wildfires blanketed Canada and the US. Record-breaking temperatures have struck Texas, Mexico, Ireland, Britain, Puerto Rico, Europe, northern Africa and Asia.

In California, WSPA insists that it wants to be part of the “climate conversation”, according to Kevin Slagle, the association’s vice-president of strategic communications. However, the trade group remains staunchly opposed to new reporting requirements proposed under the climate disclosures bill – although its representatives have said little about why.

According to Slagle, the group’s position “is based not so much on not wanting to progress, as it is how we get to those places”, noting areas where the oil and gas industry is promoting solutions like hydrogen and biofuels. “Is it that we are often pushing too far, too fast?”

Such narratives are refuted by the United Nation’s insistence that deep, rapid and sustained emissions reductions are needed now.

Companies that participate in California’s cap and trade system already report emissions information to the state, including scope 3 emissions from burning oil and gas sold by fossil fuel companies, which account for the vast majority. Scope 1 and 2 refer to emissions from a business’s day-to-day activities and electricity usage.

The disclosures bill, authored by Senator Scott Wiener, would expand reporting requirements to all companies generating revenues of more than $1bn a year. It’s more expansive than a rule currently under consideration by the US Securities and Exchange Commission and the disclosures have the potential to affect climate action worldwide, said Mary Creasman, the CEO of California Environmental Voters.

“This would be pretty monumental,” said Creasman, whose organization is sponsoring the legislation. “There is a movement to say we can’t improve what we don’t measure, full stop.”

Sometimes companies claim to reduce their climate pollution by buying offset credits, which can be used by a company or a country to offset their own emissions.

But offsets have dubious track records across industries and regions. One study into offsets for cooking stoves found that only one in seven represented actual reductions. Another study found 93% of Chevron’s offsets over the last two years were likely junk.

Chevron, which is a member of WSPA, opposes the carbon offsets bill and spent $1.27 m on lobbying this spring, the most of any oil company.

“If these companies want to get the benefit of showing they are on the right side of history, [the carbon offsets bill] will encourage them to show that they are purchasing offsets that will actually make a difference,” said the assemblymember Jesse Gabriel, who authored the bill.

Moderate democrats will decide bills’ fate

Opponents of the climate disclosures bill have been focused on swaying moderate Democrats, who are historically more aligned with corporate interests.

The bill is currently headed to the state assembly where it must first be approved by committees before proceeding to a floor vote. Last year, a nearly identical version of the bill failed in the assembly by one vote.

Democrats have a supermajority in the assembly, outnumbering Republicans 62 to 18. But a small contingent of moderate Dems, who joined Republicans in voting against the climate disclosures last year, successfully blocked the bill from passing.

Fifteen others registered “no vote recorded” in 2022. Combined, these legislators have received millions from the California Chamber of Commerce, as well as the oil and gas industry and other corporate interests.

“It’ll be a tough bill to pass in the assembly,” said Creasman. “We’re hopeful this year, because it’s part of a strong package of other corporate leadership and accountability bills.”

Meanwhile, the carbon offsets bill passed by a large majority in the assembly and is now moving through the state senate. Gabriel is hopeful about its chances.

As scrutiny of the fossil fuel industry has grown, companies have cloaked themselves as climate warriors, said Melissa Aronczyk, an associate professor of media studies at Rutgers University who studies the history of the industry’s public relations strategies. The public has caught on to squishy climate claims in recent years, but oil majors still often announce actions or aspirations that are impossible to measure.

“These are efforts to sidestep real rules, regulation or other frameworks, to actually hold these companies accountable,” Aronczyk said. “The irony is that it is a very simple need that we have, which is to phase out fossil fuels. It’s straightforward.”