BOSTON — On Thursday, Ceres filed an amicus curiae brief in the U.S. Court of Appeals for the Ninth Circuit, emphasizing strong business and advocacy support for California’s new climate disclosure laws, which the organization described as “groundbreaking.”
Diane May, senior communications manager at Ceres, said the nonprofit, nonpartisan organization works toward sustainability while maintaining innovation and job growth.
According to Ceres, the U.S. Chamber of Commerce and other trade organizations sued to block the new climate disclosure laws. Ceres Chief Program Officer Steven Rothstein called California’s climate disclosure laws a “critical step” toward providing “consistent, comparable” information on climate-related risks. Thirty-five businesses signed a letter in support of the laws.
The Ceres brief focuses on SB 253, the Climate Corporate Data Accountability Act, which requires companies with annual revenue of more than $1 billion to disclose Scope 1, 2 and 3 greenhouse gas emissions, and SB 261, the Climate-Related Financial Risk Act, which requires companies with more than $500 million in annual revenue to report climate-related financial risks and the steps they are taking to mitigate them.
Plaintiffs, including the Chamber of Commerce, alleged that the California laws violate the First Amendment and sought a preliminary injunction in federal district court. The trial court denied the plaintiffs’ request.
During the legislative process, according to the Ceres brief, the corporate and investment community expressed strong support for SB 253 and SB 261, with 59% of respondents supportive and only 9% opposed.
Ceres noted that the district court ruled SB 253 and SB 261 regulate commercial speech under the state’s “substantial interest.” The court found that many businesses already disclose such information because it is in their economic interest to provide transparency to investors and stakeholders.
While the judicial branch typically reviews laws regulating speech under strict scrutiny, it applies intermediate scrutiny to regulations of commercial speech. Under this test, a law must advance an “important or substantial government interest” and “need not be the least restrictive or least intrusive means of advancing the government’s interest.”
According to the Ceres brief, the district court found that California has a substantial interest in “providing reliable information” for investors.
Ceres highlighted business and investor support for SB 253 and SB 261 from companies including Microsoft, Adobe, Dignity Health, and IKEA USA.
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