Apple Backs California’s Proposed Emissions Reporting Rules
Mark Segal September 8, 2023
COMPANIES/ ESG REPORTING/ GOVERNMENT
Apple Backs California’s Proposed Emissions Reporting Rules
Mark Segal September 8, 2023
Tech giant Apple has expressed its support for proposed legislation in California that would require most large U.S. companies to disclose their full value chain greenhouse gas emissions, according to a letter the company sent to state Senator Scott Wiener.
The legislation, California Senate Bill 253 (SB 253), introduced by Wiener earlier this year, would require companies with revenues greater than $1 billion that do business in California to report annually on their emissions from all scopes, including direct emissions (Scope 1), emissions from purchase and use of electricity (Scope 2), and indirect emissions, including those associated with supply chains, business travel, employee commuting, procurement, waste, and water usage (Scope 3).
Disclosure obligations would begin in 2026 for Scope 1 and 2 emissions, and in 2027 for Scope 3 emissions, with measurement and reporting to be performed according to the Greenhouse Gas Protocol standards.
When he introduced the bill, Wiener noted that the new reporting rules would apply to most large U.S. companies. While the SEC is also in the process of setting its own climate-related reporting obligations for companies, the California proposals go beyond the SEC rules in some ways, with more comprehensive Scope 3 reporting requirements, and application to all large companies, not just public companies.
The bill passed in the state Senate in May, and is currently in the Assembly, where it has been ordered to its third reading.
Apple has been a long-time proponent of mandatory climate disclosure, including publicly calling on the SEC in 2021 to introduce rules requiring consistent, audited emissions reporting. In 2022, the company announced that it will require companies in its supply chain to report on progress towards achieving carbon neutrality, including on Scope 1 and Scope 2 emissions reductions related to Apple production.
In its letter to Senator Wiener, Apple said:
“We’re strongly supportive of climate disclosures to improve transparency and drive progress in the flight against climate change, and we’re grateful for your leadership to drive comprehensive emissions disclosure.”
The letter specifically commended certain aspects of the bill, including the requirement to report Scope 3 emissions, which the company said “are essential to understanding the full range of a company’s climate impacts,” the requirement for third party assurance, and the bill’s provisions to harmonize its rules with other emerging climate reporting regimes to avoid duplicate reporting and assurance.
Apple’s letter also included recommendations for California’s proposed rules, including allowing for the consideration of the use of internationally recognized reporting standards beyond the GHG Protocol, and more frequent review of the standards that can be used than the bill’s proposed 5-year review process.
The letter added:
“Your bill would encourage others to speed up their efforts towards carbon neutrality, and push them to work with their supply chains, just as Apple is doing. We thank you for your efforts to maintain California as a leader in fighting climate change.”
Mark founded ESG Today following a 20 year career in investment management and research. Prior to founding ESG Today, Mark worked at Delaney Capital Management (DCM) in Toronto, Canada, most recently as the firm’s head of U.S. equities. While at DCM, Mark was part of the firm’s ESG team, responsible for evaluating and tracking the sustainability factors impacting portfolio companies, and assessing the suitability of companies for portfolio inclusion. Mark also spent several years in the sell-side research industry, covering the technology and services sectors. Mark holds an MBA from Columbia University in New York, a BBA from the Schulich School of Business at York University in Toronto, and is a CFA charterholder.
Maybe it is time to move away from Apple products.