Fighting for Corporate Accountability

It is clearer and clearer every day that the climate crisis has harmful impacts far beyond our environment. Climate issues have emerged as a fundamental priority for those concerned about the damage that the fossil fuel and other greenhouse gas emitting industries are doing to our economy, including to consumers, stakeholders, investors, and companies themselves.  A recent study even found that 75% of institutional investors consider Environmental, Social and Governance (ESG) considerations to be an integral part of sound investing. 

Failure to take action on climate change can negatively impact the entire economy, the future of society, and the natural ecosystems upon which we depend. It is critical that investors — and the general public — understands how companies’ activities may be contributing to climate change, what the climate financial risk of their business is, and whether they have plans for transitioning to a low-carbon economy. 

Investors, consumers, stakeholders, and indeed the public writ large, deserve transparency about how companies are managing risks facing their businesses and the economy — and it should not be any different when it comes to climate.

A key element of this corporate accountability is climate change disclosure. That means publicly listed companies must be required to report on their greenhouse gas emissions and their resulting climate risks.

The state of California is often seen as a climate leader — and the state stepped up in 2023 to pass the first-in-the-nation pieces of legislation on corporate greenhouse gas emissions transparency. The legislature passed — and California Governor Gavin Newsom signed — two bills to require large domestic and international corporations doing business in the state to publicly report both their direct and indirect greenhouse gas emissions.

This was a massive win, especially as California is the fifth largest economy in the world and a place where a large number of fossil fuel and other heavy greenhouse gas emitting transnational corporations do business. However, the fight was not finished. Initially, Governor Newsom zeroed out funding for implementation of the climate disclosure laws, putting into question whether they could even take effect.

So we stepped in, and more than 12,000 of our members across the country signed our petition urging Newsom to include the necessary funding in his final annual budget proposal. We showcased the popularity of these groundbreaking laws amongst the public — and we persuaded Newsom to listen to their voices. In his final budget proposal, Newsom included the funding for implementation of these landmark corporate emissions disclosure laws.

Newsom then proposed a two-year delay before these laws would go into effect — which would have been a massive setback. However, our members continued to step up and more than 13,000 Friends of the Earth supporters called on Newsom to abandon his proposed delay. Thanks to that push, the final bill passed through with only a six-month delay.

That’s a trifecta victory. Activism got these laws passed, beat back efforts to not provide necessary funding, and stopped Newsom’s two-year delay.

This is a big win, not only for the state of California but for the country and planet as a whole. Because of the large number of international corporations doing business within the state, this will have a ripple effect globally that will also keep the public informed about the greenhouse gas emission levels of huge corporations doing business in California and beyond. 

This accomplishment doesn’t come without its challenges. Big Ag and the California Chamber of Commerce have already sued to stop implementation of the laws.

Though the fight to implement these laws isn’t over, this win should still be used as motivation within the climate activism space. By showing the Governor the widespread approval of these laws, it sends a signal to other local, state and federal leaders that legislation around transparency and climate change are popular and will only benefit the health and overall livelihood of people and the planet.