Business and agricultural groups sue California over new climate disclosure laws
SACRAMENTO, California — Business and agriculture groups sued California on Tuesday over the nation’s most sweeping climate disclosure mandates. They argued that the policy signed last year by Gov. Gavin Newsom exceeded the federal government’s authority to regulate emissions nationwide.
The U.S. Chamber of Commerce, the California Chamber of Commerce, the American Farm Bureau Federation and other groups filed the lawsuit in the U.S. District Court for the Central District of California. They argue that the new rules go too far in part because they apply to companies headquartered outside California as long as they do business in the state. The groups also claim the laws violate the First Amendment by requiring companies to comment on what the lawsuit calls a “politically charged” topic: climate change.
“These new climate reporting laws are far from cost-effective and will not have a significant impact on climate change,” Jennifer Barrera, CEO of the California Chamber of Commerce, said in a statement. “Forcing companies to report inconsistent and inaccurate information unnecessarily puts them at risk of massive fines.”
The lawsuit marks the first major legal challenge to a series of laws that attracted the attention of major corporations and environmental leaders far beyond California. It comes as the state prepares to assess how to implement the new laws. Newsom, who often touts California’s status as a global climate leader, signed the high-profile laws last year before the federal government finalized climate disclosure rules for publicly traded companies.
The lawsuit says the business groups support efforts to curb global warming emissions, but argue the new disclosure rules could lead to a “patchwork of inconsistent” laws if more states adopt emissions rules that conflict with each other are.
One of the laws requires public and private companies earning more than $1 billion annually to disclose their greenhouse gas emissions starting in 2026. The law applies to more than 5,300 U.S. companies doing business in California, regardless of where they are headquartered. Companies will have to report emissions, including those released when making products and transporting them. They will also have to disclose indirect emissions, such as employee business travel.
Supporters of the law say it will increase transparency about how big companies contribute to climate change and help them evaluate how to reduce their emissions. But the lawsuit argues that the law will be too onerous and that the emissions data could contain inaccuracies that could mislead the public.
Senator Scott Wiener, a Democrat who represents San Francisco and authored the law, called the lawsuit “outright climate denial.”
“The House is taking these extremist legal actions because many major corporations – particularly fossil fuel companies and big banks – are absolutely terrified that if they have to tell the public how dramatically they are fueling climate change, they will no longer be able to to do that. misleading the public and investors,” he said in a statement.
The business groups are also suing California over a new law that requires companies making more than $500 million annually to report every two years how climate change will affect their finances and how they plan to adapt. The lawsuit argues that the state should not require companies to “speak about the impacts of and appropriate response to climate change.”
Democratic Sen. Henry Stern of Los Angeles, who introduced the financial disclosure legislation, said in a statement that the groups supporting the lawsuit were trying to undermine the state’s climate laws.
“It is a cynical and dangerous ploy to lure the United States Supreme Court into a total rewrite of environmental federalism under the guise of a distorted version of the First Amendment,” Stern said.
___ Austin is a staff member of The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Follow Austin on X, the platform formerly known as Twitter: @sophieadanna