Supreme Court urged to block California laws requiring companies to disclose climate impacts – Los Angeles Times

Report on Legal Challenge to California’s Climate Disclosure Laws and Implications for Sustainable Development Goals

Executive Summary

A coalition of business groups, led by the U.S. Chamber of Commerce, has escalated a legal challenge to the U.S. Supreme Court, seeking to block two California laws (SB 253 and SB 261). These laws mandate corporate disclosure of greenhouse gas emissions and climate-related financial risks. The challenge centers on claims of unconstitutional compelled speech, while the laws themselves represent a significant state-level effort to advance key United Nations Sustainable Development Goals (SDGs), particularly those related to climate action and corporate accountability.

Overview of California’s Climate Legislation

The two laws at the center of the legal dispute are designed to increase corporate transparency and align business practices with climate objectives. Their implementation is directly linked to achieving global sustainability targets.

• Senate Bill 253 (SB 253): This law requires large companies operating in California to publicly disclose their full range of greenhouse gas emissions. This measure promotes corporate accountability and provides critical data for climate action initiatives.
• Senate Bill 261 (SB 261): This law mandates that thousands of companies assess and report on their climate-related financial risks and outline their strategies for mitigation. This aligns with goals for building resilient infrastructure and promoting sustainable economic models.

The Legal Challenge and Core Arguments

The plaintiffs argue that the California laws infringe upon constitutional rights and represent an overreach of state authority. Their emergency appeal to the Supreme Court is based on the following points:

1. Violation of the First Amendment: The primary argument is that the laws constitute “compelled speech,” forcing companies to adopt a state-mandated position on the controversial topic of climate change.
2. Setting National Policy: The business groups contend that California is attempting to impose its climate policy on the entire nation, affecting thousands of companies that do business within the state.
3. Coercive Intent: The appeal claims the laws are part of a campaign to pressure companies into altering their operations to align with California’s environmental agenda.

This legal action follows unsuccessful attempts to secure an injunction in lower federal courts and is supported by 25 other states who oppose what they term a “radical green speech mandate.”

Alignment with Sustainable Development Goals (SDGs)

California’s climate disclosure laws are fundamentally aligned with several key Sustainable Development Goals, providing a framework for translating global ambitions into local, enforceable policy.

• SDG 13: Climate Action: The legislation is a direct policy instrument to combat climate change and its impacts. By mandating the disclosure of emissions and climate-related risks, the laws create a mechanism for holding corporations accountable and driving decarbonization efforts.
• SDG 12: Responsible Consumption and Production: The laws promote sustainable production patterns by requiring corporate transparency. This enables consumers, investors, and regulators to make informed decisions, fostering a market that supports companies with sustainable practices and fulfills the stated aim of identifying “who’s green and who isn’t.”
• SDG 17: Partnerships for the Goals: The conflict highlights the complex dynamics between the public sector (California government), the private sector (business groups), and civil society (environmental advocates) in achieving sustainability. The legal battle underscores the challenges in forging effective partnerships for implementing climate policy.
• SDG 16: Peace, Justice and Strong Institutions: The use of the judicial system to resolve this dispute demonstrates the role of strong institutions in mediating conflicts between economic interests and public policy aimed at environmental protection and long-term societal well-being.

Conclusion and Stakeholder Perspectives

The outcome of this Supreme Court appeal will have profound implications for state-led climate regulation and the integration of SDG principles into U.S. corporate governance. The stakeholder positions are sharply divided:

• Proponents: Supporters, including environmental organizations and the laws’ authors, view the legislation as a “game-changer” and a “powerful tool” that provides the transparency necessary to incentivize corporations to reduce their climate impact.
• Opponents: The U.S. Chamber of Commerce and its allies argue the laws weaponize the First Amendment to impose costly and intrusive disclosure rules that violate fundamental rights.

The Supreme Court’s decision on whether to grant an injunction will be a critical development in the ongoing effort to balance corporate rights with the urgent need for climate action as outlined in the Sustainable Development Goals.

Analysis of SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 13: Climate Action

  This is the most central SDG. The entire article revolves around California’s new laws (SB 253 and SB 261) designed to “tackle climate change” by requiring companies to disclose their emissions and climate-related impacts. The laws are described as a “powerful tool in the fight to tackle climate change.”

• SDG 12: Responsible Consumption and Production

  The article discusses forcing corporate transparency and accountability. The laws aim to “make sure that the public actually knows who’s green and who isn’t,” encouraging companies to adopt sustainable practices and integrate this information into their public reporting, which directly relates to responsible production patterns.

• SDG 17: Partnerships for the Goals

  The article highlights the interaction and conflict between different sectors: the public sector (California government, state attorneys), the private sector (U.S. Chamber of Commerce, companies like Exxon Mobil), and civil society (environmental advocates). This dynamic illustrates the complex multi-stakeholder engagement involved in implementing climate policy.

• SDG 9: Industry, Innovation, and Infrastructure

  By compelling companies to assess and disclose their emissions and climate risks, the laws indirectly promote the upgrading of industries. The article quotes a supporter saying that when corporations are transparent, “they have the tools and incentives to tackle” their emissions, which implies a push towards cleaner and more sustainable industrial processes and technologies.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 13: Climate Action
  1. Target 13.2: Integrate climate change measures into national policies, strategies and planning.

     The article focuses on California’s SB 253 and SB 261, which are described as “first-in-the-nation carbon disclosure laws.” These laws represent a clear integration of climate change measures into state-level policy and strategy.

• SDG 12: Responsible Consumption and Production
  1. Target 12.6: Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.

     This target is directly addressed. The laws explicitly “require thousands of companies to disclose their emissions and their impacts on climate change.” SB 261 requires companies to assess their “climate-related financial risk,” and SB 253 requires them to “assess and disclose their emissions,” forcing the integration of sustainability information into their corporate reporting.

• SDG 17: Partnerships for the Goals
  1. Target 17.17: Encourage and promote effective public, public-private and civil society partnerships.

     The article details the legal battle between public entities (California Air Resources Board) and private-sector groups (U.S. Chamber of Commerce, Los Angeles County Business Federation). It also notes the support of civil society (“widely celebrated by environmental advocates”) and opposition from other public entities (“Iowa and 24 other Republican-leaning states”), showcasing the complex partnerships and conflicts central to policy implementation.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Implied Indicator for Target 12.6 (Number of companies publishing sustainability reports):

  The primary subject of the article is the implementation of laws that will “compel thousands of companies across the nation to speak on the deeply controversial topic of climate change.” The number of companies that comply with SB 253 and SB 261 by disclosing their emissions and climate risks would serve as a direct indicator of progress for Target 12.6.

• Implied Indicator for Target 13.2 (Number of countries/states with climate change strategies):

  The existence of the “first-in-the-nation carbon disclosure laws” in California is itself an indicator. The article highlights California’s role in setting a precedent for climate policy, which can be measured by tracking the adoption of similar laws in other states or at the national level. The article notes the SEC’s attempt to adopt “similar climate-change disclosure rules” as an example.

• Implied Indicator (Corporate greenhouse gas emissions data):

  The laws require companies to “assess and disclose their emissions.” This disclosed data on corporate emissions would be a crucial indicator for measuring the environmental impact of industries and tracking reductions over time, which is the ultimate goal of the legislation as stated by Sen. Scott Wiener: “they have the tools and incentives to tackle them [emissions].”.

4. Table of SDGs, Targets, and Indicators

Source: latimes.com