Many law firms have been issuing alerts of late discussing the enactment of The Climate Corporate Data Accountability Act (SB 253).  As enacted, this act will require, among other things, "reporting entities" to disclose Scope 1, 2 & 3 greenhouse gas emissions.  Reporting entities will also be required to obtain an independent third-party assurance of these disclosures. 

The Act defines "reporting entity" to mean a partnership, corporation, limited liability company, or other business entity formed under the laws of this state, the laws of any other state of the United States or the District of Columbia, or under an act of the Congress of the United States with total annual revenues in excess of $1,000,000,000 and that does business in California. 

Small businesses and those who represent small businesses should not be breathing a sigh of relief, however.   The act defines "Scope 3" emissions  as "indirect upstream and downstream greenhouse gas emissions, other than scope 2 emissions, from sources that the reporting entity does not own or directly control and may include, but are not limited to, purchased goods and services, business travel, employee commutes, and processing and use of sold products".   Thus, the act will impact not only billion dollar enterprises but also innumerable small and medium businesses that are in the stream of a reporting entities.   These small businesses in many cases will not have the resources and expertise to provide emissions data to reporting entities.   Existing contracts, moreover, may not obligate suppliers and contractors to provide emissions information to reporting entities.   In some cases, the amount of revenues derived from doing business with a reporting entity may not justify the costs of providing the information to reporting entities.