TRENTON – The Senate Environment and Energy Committee advanced the “Climate Corporate Data Accountability Act”, sponsored by Senators Bob Smith and John McKeon, which would require companies doing business in New Jersey with total annual revenues in excess of $1 billion to publicize annual greenhouse gas (GHG) emissions data.
“The operations of large businesses are a large source of GHG emissions, and in order to properly identify the best methods of emissions reduction we need to understand these sources in their entirety,” said Senator Smith (D-Middlesex/Somerset), Chair of the Senate Environment and Energy Committee. “Being transparent and forthright to the public about the extent of that role will help consumers and investors make more informed decisions as well as help both government and companies alike in effectively combatting climate change.”
The bill, S-4117, would require any partnership, corporation, limited liability company, or other business entity doing business in New Jersey with annual revenues of over $1 billion to begin annually reporting their greenhouse gas emissions with those reporting requirements being phased in over time based on the sources of the emissions. Specifically, the bill would identify the following categories:
• “Scope 1 emissions” would be defined as all direct GHG emissions that stem from sources that an entity owns or directly controls regardless of location;
• “Scope 2 emissions” would be defined as indirect GHG emissions from consumed electricity, steam, heating, or cooling purchased or acquired by an entity regardless of location;
• “Scope 3 emissions” would be defined as indirect upstream and downstream GHG emissions other than Scope 2 emissions that an entity does not own or directly control. This category would include, but not be limited to, purchased goods and services, business travel, employee commutes, as well as the processing and use of sold products.
“Large corporations ought to have a duty to be transparent with the public about the impact their businesses have on our environment,” said Senator McKeon (D-Essex/Passaic). “While the federal government denies climate change and steps back from protecting Americans, it is more important than ever to enact legislation like this on the state-level and continue the fight against climate change with the most information possible. By requiring these disclosures, consumers will be more empowered to make their own decisions and we can better identify how to drive down harmful emissions.”
Under the bill, the reporting requirements would be phased in according to the following schedule:
• Three years following enactment, a reporting entity would have to annually disclose all Scope 1, Scope 2, and Scope 3 emissions for the prior fiscal year to the Department of Environmental Protection (DEP) and an emissions reporting organization selected annually by the DEP;
• Four years following enactment, a reporting entity would have to annually disclose publicly all Scope 1 and 2 emissions for the prior fiscal year;
• Five years following enactment, a reporting entity would have to annually disclose publicly Scope 3 emissions for the prior fiscal year no later than 180 days after the public disclosure of Scope 1 and 2 emissions.
Among other provisions, the legislation would establish penalties for failing to comply with the requirements. A reporting entity in violation would face a civil administrative penalty of not more than $10,000 for a first offense, not more than $20,000 for a second offense, and up to $50,000 for a third or subsequent offense. If the violation is of a continuing nature, each day in which the violation continued after the receipt of an order to cease the violation would constitute a separate and additional offense.