Gov. Gavin Newsom in Fresno in 2021. File photo

Gov. Gavin Newsom on Saturday signed two closely-watched, first-in-the-nation bills that will force large companies to disclose their greenhouse gases that contribute to climate change and their financial risks.

Newsom approved Senate Bill 261, which requires large companies to biennially report their financial risks from climate change. But he said in a statement today that he will work with the Legislature on relaxing the law’s 2026 implementation date because the California Air Resources Board won’t have “sufficient time to adequately carry out the requirements.” He added that he also is “concerned about the overall financial impact of this bill on businesses, so I am instructing CARB to closely monitor the cost impacts.”

“I look forward to working with the Legislature on these outstanding items to ensure that the bill’s intent is achieved,” he said.

Under the new law, more than 10,000 companies with revenues exceeding $500 million to detail how climate change threatens the profitability and financial stability of their operations, not just in California, but around the world. Examples are high temperatures, wildfires, droughts and other natural conditions altered by climate change.

Newsom also signed Senate Bill 253, but voiced similar concerns about the deadline. Under that groundbreaking bill, beginning in 2026, about 5,300 U.S. corporations earning more than $1 billion and doing business in California must annually report their global emissions of carbon dioxide and other planet-warming greenhouse gases.

“The implementation deadlines in this bill are likely infeasible, and the reporting protocol specified could result in inconsistent reporting across businesses subject to the measure. I am directing my Administration to work with the bill’s author and the Legislature next year to address these issues,” Newsom said.

In the final weeks of California’s legislative session, business groups, growers and oil companies intensely lobbied lawmakers to reject the greenhouse gas bill, calling it unworkable and likely to lead to inaccurate reports of emissions. Environmental groups, big tech companies Apple, Google, Microsoft and Salesforce, and some global corporations that emphasize sustainability, including IKEA, supported it.

Any company that meets the revenue threshold and sells or produces goods or services in California will have to comply, including such large, global corporations as varied as Amazon, Chevron, McDonalds, Kroger and Walmart.

Businesses must report not only the tons of gases they emit globally from all of their own global operations and energy use, but also from less-direct sources, such as their supply chains, contractors and even consumers’ use of their products.

These indirect sources, called “Scope 3” emissions, have raised the concerns of business groups. Business groups said the estimates could be inaccurate, resulting in misguided public policy, while putting an onerous burden on companies.