In a legal battle that could set significant precedents, ExxonMobil is contesting two California laws in a federal court. The oil giant’s lawsuit, submitted to the U.S. District Court for the Eastern District of California, challenges the requirement to report global greenhouse emissions from its products, arguing that this infringes on its free speech.
The contentious legislation includes Senate Bill 253, the Climate Corporate Data Accountability Act, which mandates that large companies disclose their emissions across three categories or “scopes.” The California Air Resources Board is tasked with implementing regulations by the end of this year, requiring companies with over $1 billion in annual revenue to report their emissions. Reporting for scopes 1 and 2 is expected in 2026, with scope 3 following in 2027.
Under this framework, Scope 1 covers direct emissions from a company’s operations, Scope 2 includes indirect emissions from purchased energy, and Scope 3 encompasses emissions from the entire supply chain, which often constitutes the majority of a company’s emissions.
ExxonMobil’s lawsuit claims that these laws force the company to promote California’s “preferred message,” which they oppose, as stated in their 30-page complaint. “California may believe that companies that meet the statutes’ revenue thresholds are uniquely responsible for climate change, but the 1st Amendment categorically bars it from forcing ExxonMobil to speak in service of that misguided viewpoint,” the company asserts in its complaint.
Governor Gavin Newsom’s spokesperson, Tara Gallegos, defended the legislation, stating that the laws have been upheld in court and expressing confidence in their validity. Gallegos remarked, “Truly shocking that one of the biggest polluters on the planet would be opposed to transparency.”
ExxonMobil criticizes the legislative intent, suggesting the bills unfairly target large companies to incite public disapproval. Meanwhile, the company is still awaiting a response from the Air Resources Board after submitting a letter on September 5 outlining its concerns with the proposed reporting requirements.
The lawsuit also targets other key figures, including California Attorney General Rob Bonta and officials from the Air Resources Board.
Michael Gerrard, a climate change legal expert from Columbia University, commented on Exxon’s lawsuit, viewing it as part of the company’s longstanding opposition to climate-related regulations. Gerrard stated, “These laws do not require Exxon to make any changes in the way it produces, transports, refines or sells oil. They are just about information that Exxon doesn’t want to provide to the public.”
The legislation, according to its supporters, aims to combat corporate greenwashing by ensuring transparency in emissions reporting. Sen. Scott Wiener (D-San Francisco), the bill’s author, emphasized the importance of having accurate data for making necessary emissions cuts. “We need the full picture to make the deep emissions cuts that scientists tell us are necessary to avert the worst impacts of climate change,” he said.
Additionally, another piece of legislation, SB 261, requires companies with over $500 million in revenue to disclose climate-related financial risks, which ExxonMobil argues includes speculative predictions about future developments.
Original Story at www.latimes.com