Connect with us

California

Businesses Must Determine Before 2025 If They Fall Under California Climate Reporting Law

Published

on

Businesses Must Determine Before 2025 If They Fall Under California Climate Reporting Law


In 2023, California approved the Climate Accountability Package, a pair of bills aimed at creating climate reporting requirements. Reporting is set to begin in 2026 for data collected during 2025. Companies need to determine now if they are required to report and establish the processes to collect the data. However, delays in drafting the standards and ambiguous language are making it difficult for businesses to determine if they qualify.


The Rise of Climate Reporting

California’s climate reporting regulation is part of a global movement to require companies to disclose their greenhouse gas emissions, climate policies, and to evaluate climate risks. Driven by the net zero 2050 goal of the Paris Agreement, jurisdictions around the world are looking to reduce GHG emissions.

Advertisement

The European Union has been leading the way with the Corporate Sustainability Reporting Directive. Initially adopted in 2022, the CSRD requires climate and environmental, social, and governance reporting by most companies that operate within the EU. Reporting for large companies began in 2024. Reporting for non-EU companies and small and medium-sized enterprises has been delayed to 2026.

In the U.S., the Securities and Exchange Commission adopted a Climate-Risk Disclosure Rule in early 2024, only to delay implementation while it faced legal challenges. California and other states are moving forward with their own reporting requirements.

California’s Climate Accountability Package established the broad parameters for the reporting standards. The responsibility of drafting specific regulations and implementing the reporting standards was delegated to the California Air Resources Board. CARB was initially given until January 1, 2025 to draft the rules and processes. In September, the Legislature extended the deadline by six months to July 1.

The original legislation states that CARB shall develop and adopt regulations requiring for the reporting entity’s prior fiscal year.” Meaning, while the reporting does not take place until 2026, the data is from 2025. Businesses must determine before January 1, 2025 if they qualify as a reporting entity so they can begin collecting the required information.

Advertisement

Reporting requirements are divided into two categories, based on the total annual revenue of the company. Unlike the SEC, the California reporting requirements apply to both publicly traded and privately held companies. Only U.S. companies will have to report.


Reporting Entities

The highest level of reporting is required of large companies. Senate Bill 253 required companies who do business in California and have an excess of $1 billion in revenue, defined as “reporting entities”, to submit an annual report for Scope 1 and Scope 2 starting in 2026. Scope 3 reporting will begin in 2027.

Generally, Scope 1 GHG emissions are those that come directly from the company. Scope 2 are indirect GHG emissions from the company’s power source. Scope 3 are GHG emissions from the value chain, both from suppliers and consumers.

Scope 3 has been highly debated as it is considered by the business community as being overly burdensome. When the SEC implemented their rule, they chose to not require Scope 3. The EU requires it.


Covered Entities

Senate Bill 261 required companies who do business in California and an excess of $500 million in revenue, defined as “covered entities”, to submit a biennial climate-related financial risk report.

Advertisement

Climate risk is defined as “material risk of harm to immediate and long-term financial outcomes due to physical and transition risks, including, but not limited to, risks to corporate operations, provision of goods and services, supply chains, employee health and safety, capital and financial investments, institutional investments, financial standing of loan recipients and borrowers, shareholder value, consumer demand, and financial markets and economic health.”

This is a much lower requirement as it does not include any level of GHG emission reporting.


What Classifies As “Doing Business in California”?

In the development and interpretation of law, words matter. Codes, ordinances, laws, and regulations typically begin with a list of definitions of key terms. Frequently, those definitions are prefaced with the phrase “for purposes of this section.” This allows lawmakers to define a term for limited use in that section of the law preventing new legislation from negatively impacting established law. Definitions bring clarity, allowing those subjected to the law, regulators, attorneys, and judges to know the exact intent of the lawmakers.

In the Climate Accountability Package, the phrases “covered entity” and “reporting entity” are both defined in their respective sections. The only notable distinction between the definitions is the annual revenue threshold. Both include the phrase “that does business in California.”

While the dollar amount thresholds are clear, there is a question as to what classifies as “doing business” in California. The definition varies by section of the state code and by state agency. The Climate Accountability Package amended the state’s Health and Safety Code, that does not have a definition of doing business.

Advertisement

Presumably, CARB will provide a clear definition when they release the standards in July. However, companies will need to determine by January 1 if they need to collect data. In the interim, there are two key definitions that help provide some guidance.

California Corporations Code

Section 191 (a) of the California Corporations Code gives a definition of “entering into repeated and successive transactions of its business in this state, other than interstate or foreign commerce.” However, that definition is for the phrase “transact intrastate business” and is only for “the purposes of Chapter 21”, requiring registration with the Secretary of State.

Notably, “a foreign corporation shall not be considered to be transacting intrastate business merely because its subsidiary transacts intrastate business.” This leaves raises a question as to if a subsidiary can trigger reporting by the parent company. The 2024 amendment clarified that a subsidiary does not have to file separate from the parent company, but did not address this question.

California Revenue and Taxation Code

Article 1, Section 23101(a) of the California Revenue and Taxation Code gives a definition of “doing business.” The California Franchise Tax Board interprets the definition to mean meeting one of five conditions. The board updates the dollar thresholds annually. A company is considered doing business in California if

  1. The company is “actively engaging in any transaction for the purpose of financial or pecuniary gain or profit”;
  2. The company is “organized or commercially domiciled” in the state;
  3. The company has annual sales in California exceed the lower of $711,538 or 25% of the company’s total sales;
  4. The company has real property or tangible personal property in California exceeds the lower of $71,154 or 25% of the company’s total; or
  5. The company has payroll compensation in California exceeds the lower of $71,154 or 25% of the company’s total payroll.

The Struggle For Businesses

While there will likely be a delay in implementing California’s climate reporting requirements, companies have to decided soon how to respond. The choice comes with a hefty price tag. The SEC estimated compliance with their rule would cost a company approximately $1 million the first year. There is no reason to think California’s will be any different. As a result, companies are faced with a difficult decision – move forward with costly programs or hope for a delay.

There are a lot of unanswered questions while CARB drafts the climate reporting standards. However, given the current timeline, companies need to act now to evaluate if they meet the minimums and get their process in place by January 1.

Advertisement



Source link

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

California

Trump wants even looser AI guardrails. How California could impose more

Published

on

Trump wants even looser AI guardrails. How California could impose more

In summary

President-elect Trump has vowed to rescind an executive order that imposed AI safeguards, and could use tech to enable mass deportations. How far will California the other direction?

California Gov. Gavin Newsom is preparing to wage a legal war against President-elect Donald Trump, convening a special legislative session next month to try to “Trump-proof” the state. But it appears Newsom and California legislators won’t initially include artificial intelligence safeguards in that fight, even though AI regulations were a major preoccupation of the Legislature this year.

Trump has promised to immediately rescind President Joe Biden’s executive order that had imposed voluntary AI guardrails on tech companies and federal agencies. The president-elect’s administration could also, immigrant advocates say, use AI tools to assist the mass deportation he has pledged to implement. 

Advertisement

While California adopted a number of AI regulations earlier this year, other issues are likely to take priority in Newsom’s special session, legislators told CalMatters.

There are signs, though, that AI could — in the not-so-distant future  — go from abstract concern to prominent political cudgel between the Trump administration and California’s Democratic leaders. It could be another high-profile way to challenge Trump and his newfound tech allies, some of whom have gleefully proclaimed a new, deregulated era for artificial intelligence products.

“I think Newsom and the California Legislature have an opportunity to step into the gap that the federal government is leaving — to create a model environment for safe and rights-respecting technology and deployment,” said Janet Haven, executive director of the Data & Society Research Institute, a nonprofit that studies the social implications of AI and other technologies. “On the other hand, there’s no way to get around the fact that Big Tech is right there, and will be a huge factor in whatever the California Legislature and Newsom want to advance in terms of AI legislation.”

Why California lawmakers and others worry about AI

AI safety advocates told CalMatters they’re not necessarily sweating the apocalyptic AI nightmares imagined by some doomsayers. Instead, they are focused on how AI tools are increasingly used in healthcare, housing, the labor force, law enforcement, immigration, the military, as well as other industries and fields prone to discrimination, surveillance, and civil rights violations — because there’s evidence that such tools can be unwieldy, inaccurate, and invasive. “We have documentation that shows how these AI systems are likely to do all sorts of things—they’re pattern-making systems, they’re not really decision-makers, but the private sector and the public sector are using them as a substitute for decision-makers,” said Samantha Gordon, chief program officer at TechEquity. “That’s not wise.”

Santa Ana Democratic Sen. Tom Umberg told CalMatters that 2024 “was a bit of a testing year” for AI bills. California lawmakers outlawed sexually explicit deepfakes and certain election-related deepfake content, required tech companies to provide free AI detection tools, and stipulated that tech companies must publicly release data about their AI training tools.

Advertisement

Gov. Newsom ultimately signed roughly 20 AI bills into law. But he also controversially vetoed a major bill by San Francisco Democratic Sen. Scott Wiener and would’ve instituted significant testing requirements on AI tools to make sure they avoid catastrophic outcomes. In his veto message, Newsom wrote that the bill risked curtailing innovation, but he added that he wanted to “find the appropriate path forward, including legislation and regulation.” 

“Newsom’s incentive for strengthening his relationship with Silicon Valley is probably stronger than his need for yet one more issue to fight over with Donald Trump.”political analyst Dan Schnur

Wiener told CalMatters he’s working on updated legislation that could garner “broader support.” Such a bill would presumably include additional buy-in from the tech sector, which the state is relying on for tax revenues, and which has a notable lobbying presence in Sacramento — Google just racked up the largest quarterly lobbying tab in a decade.

Asked whether to expect more Big Tech lobbying against regulatory efforts in California, Palo Alto Democratic Assemblymember Marc Berman said: “It’s going to be a good time to be a lobbyist. They’re going to do very well.”

Though Wiener’s AI testing bill was batted down, as were a few other noteworthy AI bills that didn’t make it out of the Legislature, California is “far and away the center of AI regulation in the U.S,” said Ashok Ayyar, a Stanford research fellow who co-wrote a comparative analysis of Wiener’s bill against the European Union’s more comprehensive AI efforts.

A lack of federal AI regulation and legislation

California is leading on AI in large part because the competition is basically non-existent.

Advertisement

Congress hasn’t passed meaningful AI legislation. Asked about Trump and the incoming Republican majority, San Ramon Democratic Assemblymember Rebecca Bauer-Kahan said, “There isn’t much regulation to deregulate, to be honest.”

Sans federal legislation, President Biden issued an executive order in October 2023 intended to place guardrails around the use of AI. The order built on five policy principles on the “design, use, and deployment of automated systems to protect the American public.” Biden directed federal agencies “to develop plans for how they would advance innovation in the government use of AI, but also protect against known harms and rights violations,” said Haven. Soon after Biden’s executive order, his administration created the U.S. AI Safety Institute, which is housed within the Commerce Department. 

Biden’s executive order relies on tech companies, many of which are based in California, to voluntarily embrace the administration’s suggestions; it also relies on agencies like the Department of Homeland Security, which includes Immigration and Customs Enforcement and Customs and Border Protection, to be transparent and honest about how they’re using AI technology and not violate people’s civil rights. 

Like most executive orders, Biden’s AI edict is loosely enforceable and fairly easy to reverse.

“Stick a fork in it, it’s over. The US will be the preeminent AI superpower in the world after all.”venture capitalist marc andreessen

Trump has already promised to repeal Biden’s executive order on day one of his term; the 2024 Republican platform argues that the executive order “hinders AI Innovation, and imposes Radical Leftwing ideas on the development of this technology.” Homeland Security and other executive branch agencies may be granted far more flexibility when Trump takes office, though advocates say the bar was already low; a June 2024 report from the nonprofit Mijente titled “Automating Deportation” argues the department hasn’t followed through on the Biden administration’s already relatively meager requests.

Advertisement

After Trump clinched the 2024 presidential election, segments of the tech industry were jubilant about what they foresee for the AI industry—including an imminent uptick in government contracts. “Stick a fork in it, it’s over,” Marc Andreessen, the billionaire general partner of venture capital firm Andreessen Horowitz, wrote on X. “The US will be the preeminent AI superpower in the world after all.”

Fully unleashed federal agencies

If mass deportation of undocumented immigrants come to pass, as Trump has promised, that would require a wide variety of technologies, including AI tools. Homeland Security already employs an AI system called the Repository for Analytics in a Virtualized Environment, or RAVEn, a nine-figure government contract. The department also has access to an extensive biometric database, and monitors certain undocumented immigrants outside of detention centers via a surveillance tool that utilizes AI algorithms to try to determine whether an immigrant is likely to abscond. 

“We know from Trump’s first administration that there are going to be fewer guardrails with the use of this tech, and agents will feel even more emboldened,” said Sejal Zota, co-founder and legal director of Just Futures Law, a legal advocacy group focused on immigration, criminal justice and surveillance issues. “That’s one area where we’re going to see increased AI use to support this mass deportation agenda.”

To the best of Zota’s knowledge, there’s little California lawmakers or courts could do to prevent federal agencies from using AI tech against vulnerable populations, including undocumented immigrants. “Is it an issue? Absolutely, it’s an issue,” said Sen. Umberg. “What can we do about it? What can we do about federal agencies using artificial intelligence? We can’t do much.”

Estimates show there are at least 1.8 million undocumented immigrants in California.

Advertisement
A conference hall with attendees and colorful signage related to artificial intelligence.
The Dreamforce conference hosted by Salesforce in San Francisco on Sept. 18, 2024. Dreamforce is an annual tech conference attracting thousands of participants and is the largest AI event in the world, according to Salesforce. Photo by Florence Middleton for CalMatters

Another potential threat to California’s AI regulations is if the majority Republican Congress passes looser AI rules of its own, preempting state law. California lawmakers, including Assemblymember Bauer-Kahan and Sen. Umberg, said they don’t think significant AI legislation will make it to President Trump for his signature. 

Congressional gridlock is one reason Sen. Wiener said he’s pursuing AI regulation in the California Legislature in the first place: “I was very clear that if (the issue) were being handled statutorily at the federal level, I’d be happy to close up shop and go home,” he said. “But it wasn’t happening, and it’s certainly not going to happen under Trump.”

Not everyone believes Congress will remain stagnant on this issue, however, particularly with one party now dominant in Washington. “I wouldn’t underestimate the creativity of this incoming administration,” said Paromita Shah, executive director of Just Futures Law.

Added Haven: “I think it’s possible that with a Republican trifecta, we’ll see an attempt to pass a very weak data privacy law at the federal level that preempts state law. Then it’s a game of whack-a-mole between the state legislature and the federal legislature.”

California’s next AI steps

Newsom has to date signed many AI bills but turned back others he says go too far and risk inhibiting  an industry he has sought to cultivate as a government partner. A spokesperson for Newsom did not directly respond to CalMatters’ questions for this story, instead providing a statement highlighting the state’s role in shaping the future of so-called “generative AI,” a recent and innovative form of the technology behind tools like ChatGPT, DALL-E, and Midjourney: “California has led the nation in protecting against the harms of GenAI while leveraging its potential benefits,” said spokesperson Alex Stack. 

President-elect Trump’s team did not respond to written questions from CalMatters.

Advertisement

Dan Schnur, a political analyst and professor at UC Berkeley and other campuses, predicted the governor will save his political capital for other clashes. “Newsom’s incentive for strengthening his relationship with Silicon Valley is probably stronger than his need for yet one more issue to fight over with Donald Trump,” Schnur said.

Florence G’Sell, a visiting professor at Stanford’s cyber policy center, cautioned Newsom against clinging to the deregulatory side of Silicon Valley. “There is really a very strong movement that wants to highlight the risks of AI, the safety questions,” G’Sell said. “If I were the governor, I wouldn’t be insensitive to this movement and the warnings.” 

Lawmakers are eyeing other avenues to shore up Californians’ redresses against AI technology. Assemblymember Bauer-Kahan previously told CalMatters she plans to reintroduce a stronger version of a bill, which failed to advance past the Legislature last session, to crack down on discriminatory AI practices. Another top AI priority, according to Menlo Park Democratic Sen. Josh Becker, is less sexy, but perhaps just as important: “closely monitor the implementation of this year’s regulatory framework (that we just passed),” he wrote. 

California’s next AI regulatory steps were always going to be intensely analyzed. That’s even more so the case now, with Trump returning to office—a challenge state lawmakers are embracing.

“One of the things that is somewhat amusing to me is when folks come to me and say, ‘Whatever you do in California is going to set the standard for the country,’ Sen. Umberg said. “As a policymaker, that’s catnip. That’s why I ran for office.”

Advertisement
Tech is growing as a source of California tax revenue — that’s the good news and the bad news

Why Gavin Newsom vetoed California’s bold bid to regulate AI

Why Silicon Valley is trying so hard to kill this AI bill in California



Source link
Continue Reading

California

Rain and snow pummel Northern California in latest wave of damaging weather to strike West Coast

Published

on

Rain and snow pummel Northern California in latest wave of damaging weather to strike West Coast


SANTA ROSA, Calif. — A major storm pummeled Northern California with rain and snow on Wednesday night and threatened to cause flash flooding and rockslides in the latest wave of damaging weather to wash over the West Coast.

The National Weather Service extended a flood watch into Saturday for areas north of San Francisco as the strongest atmospheric river — a large plume of moisture flowing onshore — that California and the Pacific Northwest has seen this season inundated the region. The storm system unleashed winds the night before that left two people dead and hundreds of thousands without power in Washington state.

Up to 16 inches of rain (about 41 centimeters) was forecast in Northern California and southwestern Oregon through Friday. By Wednesday evening, some areas in Northern California had experienced heavy rain, including Santa Rosa, which had seen about 5 inches (about 13 centimeters) within 24 hours, according to Marc Chenard, a meteorologist with the National Weather Service.

Dangerous flash flooding, rockslides and debris flows were possible, officials warned. About a dozen small landslides had struck in northern California in the last 24 hours, including one on Highway 281 on Wednesday morning that caused a vehicle crash, said Chenard.

The National Weather Service in the Bay Area warned people that the atmospheric river was focused on the North Bay and to “expect heavy rain to continue tonight, Thursday into Friday. This will result in mudslides, road closures.”

Advertisement


The storm system, which first hit Tuesday, is considered a “ bomb cyclone,” which occurs when a cyclone intensifies rapidly.

A winter storm watch was in place for the northern Sierra Nevada above 3,500 feet (1,066 meters), where 15 inches (38 centimeters) of snow was possible over two days. Wind gusts could top 75 mph (121 kph) in mountain areas, forecasters said.

The storm had already dumped more than a foot of snow along the Cascades by Wednesday evening, according to the National Weather Service. Forecasters warned of blizzard and whiteout conditions and near impossible travel at pass level.

In Washington, there were nearly 376,000 power outage reports Wednesday evening, resulting from strong winds and rain the night before, according to poweroutage.us. Falling trees struck homes and littered roads across western Washington, killing at least two people. One woman in Lynnwood was killed when a large tree fell on a homeless encampment, while another woman in Bellevue was killed when a tree fell on a home.

More than a dozen schools were closed in the Seattle area Wednesday and some opted to extend those closures through Thursday.

Advertisement


In California, there were reports of nearly 21,000 power outages as of Wednesday evening.

Southbound Interstate 5 was closed for an 11-mile (18-kilometer) stretch from Ashland, Oregon, to the California border on Wednesday morning due to extreme winter weather conditions in northern California, according to the Oregon Department of Transportation. It was expected to be a long-term closure, the department said.

Hundreds of flights were delayed and dozens were canceled at the San Francisco International Airport, according to Flight Aware.

The weather service issued a flood watch for parts of southwestern Oregon through Friday evening, while rough winds and seas temporarily halted a ferry route in northwestern Washington between Port Townsend and Coupeville.

___

Advertisement


Golden reported from Seattle.



Source link

Continue Reading

California

Top 18 running backs in California high school football playoffs | Sporting News

Published

on

Top 18 running backs in California high school football playoffs | Sporting News


The high school football playoffs are underway across California with several big games set for this weekend. Many of the state’s top running backs have helped lift their teams into position for a deep postseason run.

Here’s a look at 18 of California’s top high school running backs who are still in action this season.

Top 18 running backs in California high school football playoffs

Derrick Blanche Jr., De La Salle – senior (Portland State)

Blanche has been a very consistent performer for the Spartans over the past three seasons, closing in on 3,000 all-purpose yards. He’s scored 10 times on the ground each of the past two seasons and is headed to play at Portland State next season.

Jordon Davison, Mater Dei – senior (Oregon)

Running the ball for the nation’s top team, Davison has had a light workload. He’s rushed for 764 yards and 12 touchdowns, giving him 43 touchdowns in his four-year varsity career. He committed to Oregon in June after amassing 50 scholarship offers.

Koen Glover, St. Bonaventure – senior

Glover broke out with nearly 1,200 yards on the ground in 2023 and has followed that up with 1,584 through 10 games as a senior. He has 46 career touchdowns and has also contributed as a returner.

Advertisement


Brice Hawkins, Simi Valley – senior

Hawkins has carried the ball more than 450 times over the past two seasons, averaging more than seven yards per rush. This year, he’s run for nearly 1,500 yards and 28 touchdowns, adding more than 300 yards and five touchdowns through the air.

Dorian Hoze, Murrieta Valley – senior

Hoze broke out in 2023 and has improved on those numbers with 1,500 yards and 23 touchdowns through 10 games. He’s 33 yards shy of 3,600 for his career.

Carter Jackson, Folsom – senior (Nevada)

Jackson is averaging 10 yards per carry as a senior and has scored seven times on the ground this year, giving him 50 for his career.

Kingston Keanaaina, St. Francis – senior (BYU)

Keanaaina has rushed for more than 1,700 yards in 10 games this season and recently passed the 4,000-yard mark for his career. He’s found the end zone 16 times this year while averaging over eight yards per carry.

Dominic Kelley, De La Salle – senior

Paired with Blanche, Kelley has averaged more than nine yards per carry this season and has scored 28 touchdowns over three varsity seasons.

Advertisement


Sean Morris, Loyola – junior

Morris has gone over 1,100 rushing yards for the second consecutive year and sits at 1,597 total yards with 16 touchdowns through 11 games. Kansas is among the many schools that have extended a scholarship offer.

Deshonne Redeaux, Oaks Christian – junior

Redeaux has gone over the 100-yard mark six times in nine games, scoring 12 touchdowns through last week. Georgia, Alabama and Ohio State are among his nearly 30 scholarship offers.

Jamar Searcy, Pittsburg – senior (Washington State)

Searcy has contributed to all three phases for the Pirates. He’s racked up 1,257 yards and 17 touchdowns on offense, also grabbing two interceptions on defense.

Brandon Smith, Central (Fresno) – junior

Smith has nearly doubled his output from a year ago, rushing for nearly 1,500 yards and 19 touchdowns through 12 games. He’s also reeled in 23 passes for 230 yards.

Max Turner, Granite Hills – senior (Utah Tech)

Turner has taken his game to the next level as a senior, rushing for more than 1,500 yards in 10 regular season games. He’s scored 47 touchdowns over the past two years and recently committed to Utah Tech.

Advertisement


Alexander Villanueva, Monte Vista – senior

Villanueva has gone over the 200-yard mark in a game seven times this season including each of the past four. He rushed for a career-high 365 yards in last week’s 47-46 playoff win.



Source link

Continue Reading

Trending