CARB’s Watered Down GHG Disclosure Proposal Would Let Major Polluters Off the Hook

WASHINGTON — The California Air Resources Board (CARB) is considering proposing a watered down greenhouse gas (GHG) emissions standard within its landmark climate disclosure program for large companies doing business in California. A new report released today from Americans for Financial Reform Education Fund and Public Citizen finds CARB’s initial proposal would fail to require most emissions for major polluting industries, like oil and gas firms and financial companies, and would result in incomplete and misleading data for users.

The landmark legislation (SB253) authorizing the new disclosure program requires companies to disclose GHG emissions in accordance with the GHG Protocol, the global standard that incorporates various categories of upstream and downstream emissions (called “Scope 3”) in GHG inventories. CARB has proposed an abbreviated version of the GHG Protocol that excludes major categories, such as emissions from customers’ use of fuel products.

Several sectors would need to disclose less than a quarter of their overall corporate emissions, including financial institutions (0.02 percent), car manufacturers (13 percent), oil and gas companies (16 percent), and real estate companies (21 percent) according to analysis of data from the Carbon Disclosure Project. Meanwhile, cement and steel companies would need to disclose the vast majority of their emissions.

“Requiring only partial greenhouse gas emissions disclosure fails to comply with the letter and intent of the law, it will land unevenly on different sectors and companies, and it will provide incomplete and misleading data for users,” said Alex Martin, climate finance policy director at Americans for Financial Reform Education Fund. “There is no way to slice and dice the standard to reflect every industries’ desired exceptions and still produce useful data. The only fair and effective path forward is to include the full range of emissions outlined in the GHG Protocol—as the law requires—on a swift timeline.”

“The board’s proposed approach to Scope 3 emissions disclosure would provide no standardization and would undermine the ability for data users to compare corporate emissions,” said Elyse Schupak, policy advocate with Public Citizen’s Climate Program. “Rather than providing complete, transparent, and useful corporate emissions data, the proposal—if implemented—will mislead investors, consumers, and others about the absolute and relative GHG emissions of companies and industries.”