A climate bill that would affect thousands of businesses operating in California and their supply chains was signed by Gov. Gavin Newsom over the weekend.

SB 253 would require the California Air Resources Board to create and adopt regulations that require any company earning more than $1B in annual revenue and operating in California to publicly disclose all greenhouse gas emissions released from both their operations and their supply chain, or what’s commonly called Scope 3.

The California Air Resources Board has until January 2025 to develop those regulations. Public and private companies alike will comply in phases, starting in 2026, according to the bill.

When signing the bill, Newsom called the bill an “important policy” that confirms California as a leader on climate action, but also noted that “the implementation deadlines in this bill are likely infeasible and the reporting protocol specified could result in inconsistent reporting across businesses subject to the measure.”

Further details on what the deadlines should be, or what protocols he would advocate for, were not immediately available from the governor's press office.

Newsom added he was directing his administration to work with the state legislature next year to address these issues.

The governor also expressed concern about the financial burdens that the bill could have on businesses and directed the air resources board to “closely monitor” the cost impact of complying.

The motivation behind the bill is that disclosures motivate meaningful environmental progress, state Sen. Scott Wiener said in a release announcing the bill's signature by the governor.

“When the US [Environmental Protection Agency] created the Toxic Release Inventory, a corporate toxics disclosure regime, total releases of substances covered by the disclosures dropped 54.5% from 1988-2001,” the release says. “A recent study in Science found that mandatory disclosures could cut total corporate emissions 70% by pushing laggard companies to cut emissions to the median level of their industry.”

Far south of Sacramento in the Inland Empire, the South Coast Air Quality Management District is struggling with getting companies to comply with a rule it enacted in 2021 aimed at mitigating air pollution generated by the expansive warehouse and logistics industry that operates out of the region.

Regulators require that reports submitted to the air district include information on yearly truck traffic, the size of the warehouses and information on what mitigating measures such as solar panels are in place that balance out emissions, the Los Angeles Times reported in September.

Only 45% of the 1,019 companies the rule applies to submitted the required reports by the March 2023 deadline, according to the Los Angeles Times. The SCAQMD told the newspaper that businesses were facing fines as high as $11.7K for each day they were out of compliance.