By Clark Mindock
(Reuters) – Major U.S. business groups sued California on Tuesday seeking to overturn the state’s new sweeping climate disclosure laws that require companies to publicly report their greenhouse gas emissions and climate-related financial risks.
The lawsuit was filed in Los Angeles federal court by the biggest U.S. business lobby, the U.S. Chamber of Commerce, along with the American Farm Bureau Federation and several California business groups. They claim the first-of-their-kind laws will impose “massive” costs on businesses and violate the constitutional free speech protections by compelling the disclosures.
The groups also claim the laws are invalid because they act as de facto national emissions regulations, an area reserved for the federal government.
The California Air Resources Board, which was named as a defendant in the lawsuit, declined to comment.
Signed into law last year by Democratic Governor Gavin Newsom, the two laws aim to help the public and investors evaluate climate-related claims by major companies.
One of the challenged laws requires public and private companies that are active in the state and generate revenue of more than $1 billion annually to publish an extensive account of their carbon emissions starting in 2026. The law requires the disclosure of both the companies’ own emissions and emissions by their suppliers and customers.
The other challenged law requires companies that operate in the state with over $500 million in revenue to disclose climate-related financial risks and strategies to mitigate that risk.
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