(September 4, 2008) Strong opposition by the California Chamber of Commerce has helped to defeat a bill that would have disadvantaged California businesses by requiring the California State Controller to develop a standard for California businesses to report all potential climate change risks or opportunities to their shareholders. 

Although SB 1550 (Florez; D-Shafter) was intended to help shareholders understand a firm’s future and present outlook, the bill would have confused and misled shareholders that rely on these disclosures for their investment decisions.

The bill was placed on the Senate inactive file, following the Senate’s refusal to concur in some amendments offered by the Assembly on a vote of 18-19.

The CalChamber believes SB 1550 is premature in that the California Air Resources Board (CARB) is working on the scoping plan for implementing AB 32. CARB has not yet developed the key regulations and there is no indication of the cost impact of these regulations on business. Thus, companies could have only guessed as to what impacts or risks they pose.

In opposing the bill the CalChamber pointed out that many companies are taking the initiative to educate their shareholders and public about their climate change efforts. This is a positive step and should be encouraged. Creating an unnecessary standard that will give no certainty and lead to misinformation, however, gives the wrong signal to California businesses and the investor community.

It is important that if California wants to remain an environmental and technological leader in the globe, that the state continue to work on climate regulation in a way that keeps businesses engaged and a part of the solution. SB 1550 was not the answer. 

Key Vote

The Senate refused to concur in Assembly amendments to SB 1550 on August 31 by a vote of 18-19.

Ayes: Alquist (D-San Jose), Cedillo (D-Los Angeles), Corbett (D-San Leandro), Florez (D-Shafter), Kehoe (D-San Diego), Kuehl (D-Santa Monica), Lowenthal (D-Long Beach), Migden (D-San Francisco), Negrete McLeod (D-Chino), Oropeza (D-Long Beach), Padilla (D-Pacoima), Perata (D-Oakland) Ridley-Thomas (D-Los Angeles), Romero (D-Los Angeles), Scott (D-Altadena), Simitian (D-Palo Alto), Steinberg (D-Sacramento), Wiggins (D-Santa Rosa).

Noes: Aanestad (R-Grass Valley), Ackerman (R-Tustin), Ashburn (R-Bakersfield), Battin (R-La Quinta), Calderon (D-Montebello), Cogdill (R-Modesto), Correa (D-Anaheim), Cox (R-Fair Oaks), Denham (R-Merced), Dutton (R-Rancho Cucamonga), Harman (R-Huntington Beach), Hollingsworth (R-R-Murrieta), Machado (D-Linden), Maldonado (R-Santa Maria), Margett (R-Arcadia), McClintock (R-Thousand Oaks), Runner (R-Antelope), Torlakson (D-Antioch), Yee (D-San Francisco).

Absent/abstaining/not voting: Ducheny (D-San Diego), Vincent (D-Inglewood), Wyland (R-Belmar).