ImpactAlpha, Sept. 18 – Will he or won’t he? Gavin Newsom put to rest questions about the fate of two landmark bills passed by the state’s legislature that would require large businesses to disclose their direct and indirect carbon emissions and disclose climate-related risks and plans to address them.
“Of course I’m going to sign those bills,” Newsom told The New York Times’ David Gelles at a kickoff ceremony for Climate Week NYC on Sunday. “With a modest caveat,” he added. “We have some cleanup on some little language.”
Newsom cited California’s record of climate leadership, from regulating tailpipe emissions to launching the nation’s first cap and trade program and Newsom’s own mandate to phase out the sale of internal combustion engine cars in the state by 2035.
The state’s latest move: a lawsuit filed on Friday against oil and gas companies that could have far-reaching consequences. The suit charges Exxon Mobil, Chevron, Shell, BP, ConocoPhillips and The American Petroleum Institute with suppressing information and misleading the public and policy makers about the risks posed by oil and gas emissions. Their actions, it maintains, have delayed climate action and resulted in natural disasters that have imposed staggering costs on California and society.
“The climate crisis is a fossil fuel crisis. And these guys have been playing us for fools,” said Newsom at the Climate Week session. “These guys have been lying since the 50s.” Newsom singled out California-based Chevron, pointing to its measly investments in clean technology and its $75 billion in stock buybacks and dividends.
The suit seeks a kind of “loss and damages” fund that would compensate the state for disaster recovery and fund adaptation efforts.
California is not the first to file suit against oil and gas companies, but it is the most powerful entity to do so to date, and could draw in other states.
The news follows reports in The Wall Street Journal that Exxon’s leadership, including Rex Tillerson, who went on to be Donald Trump’s secretary of state, actively worked to sow confusion about climate change, in contradiction to public statements.
For Tillerson, the revelations are “obituary-changing,” the Rockefeller Family Fund’s Lee Wasserman told the Journal.
California’s climate disclosure and risk bills, SB 253 and 261, respectively, are likely to beat the Securities and Exchange Commission to the punch. The federal agency has been mulling similar climate rules, but has delayed finalizing them amid pushback and Republican threats of legal action.
“This action by California will help lead the way towards the kind of clear, comprehensive and comparable data on climate risks and impacts that investors, policymakers and communities need,” said Fran Seagull of the U.S. Impact Investing Alliance.
“These two first-in-the-nation bills will provide unprecedented insight into corporate climate emissions and financial climate risk,” said Mindy Lubber of the environmental business group Ceres. “This is exactly the kind of policy framework that investors have long sought to better understand how companies are working to manage and mitigate the immense financial impacts of the climate crisis.”
As Newsom suggested, the devil is in the details. Stanford Law School’s Alicia Seiger cautions that disclosure has limited effectiveness, and may benefit carbon counting software companies, consultants, and lawyers more than the planet.
“We all lose if climate action is relegated to a compliance function,” Seiger, who also co-chairs the California Climate Risk Disclosure Advisory Group, wrote on LinkedIn.
A better approach: “If SB 253 required companies to engage in carbon accounting by furnishing ledgers with an accurate measure of cradle-to-gate emission,” she says, “the bill would better achieve its intended outcomes.”