The California Chamber of Commerce and associated organizations have initiated legal action against the state of California regarding laws that mandate the disclosure of climate-related information.

The California Chamber of Commerce, along with a coalition of business groups, has filed a lawsuit in the U.S. District Court for the Central District of California challenging the state’s new climate reporting laws, SB 253 and SB 261. The lawsuit, filed on January 30, argues that these laws violate the First Amendment by compelling businesses to make public statements that may be inaccurate or with which they disagree. It also claims that the laws conflict with existing federal law and the Constitution’s delegation of power to regulate interstate commerce.

In a statement, CalChamber President and CEO Jennifer Barrera explained that the laws are problematic because they require companies to report on emissions across their entire supply chain, including indirect emissions, which can be difficult to accurately calculate. She also pointed out that the laws will impose significant costs on businesses without significantly reducing emissions. While the CalChamber supports cost-effective policies to address climate change, it believes that these reporting laws are not the most effective approach.

The plaintiffs in the lawsuit include the U.S. Chamber of Commerce, American Farm Bureau Federation, Los Angeles County Business Federation, Central Valley Business Federation, and Western Growers Association. They argue that the reporting requirements in SB 253 and SB 261 are burdensome and could subject businesses to enormous penalties, particularly small businesses that may not have the resources to accurately measure their emissions.

The laws, which were signed into law last year, require companies to report on their worldwide climate-related financial risks and proposed mitigation strategies, regardless of where they operate. This means that companies across the U.S. and worldwide could be subject to these reporting requirements if they have even minimal operations in California. The lawsuit also alleges that California is in violation of the federal Clean Air Act, which preempts a state’s ability to regulate emissions in other states.

Tom Quaadman, executive director of the U.S. Chamber of Commerce Center for Capital Markets Competitiveness, warned that these laws could lead to a patchwork of conflicting reporting requirements across different states, creating a burden for businesses. He also expressed concern that these laws could undermine the role of federal regulators in regulating emissions.

In summary, the California Chamber of Commerce and other business groups are challenging the state’s new climate reporting laws, arguing that they violate the First Amendment and conflict with federal law. They believe that these laws will impose significant costs on businesses without effectively reducing emissions. The outcome of this lawsuit could have implications for businesses across the U.S. and worldwide, as well as for the role of federal regulators in addressing climate change. 

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