By Ross Kerber, US Sustainable Business Correspondent

A pair of new California laws requiring corporate climate disclosures has raised cost concerns from business groups. Exactly how much extra they will pay seems murky, but some firms already make similar disclosures for around $533,000 a year.
    
That figure comes from a past study that has gotten new attention after California Gov. Gavin Newsom signed the new laws on Oct. 7, analyzed here by Reuters. You can read about the figure below, and how it has set expectations for a separate new rule the top U.S. securities regulator has been promising for months now.
    
This week I've also flagged a story on Big Tobacco's workaround for an upcoming European Union ban on flavored heated products, and a cool read about high-tech sails to cut fuel consumption by a dry bulk carrier ship.
    
I invite you to connect with me on LinkedIn where I welcome comments and feedback. Or if you have a news tip, potential content, or general thoughts please email me at ross.kerber@thomsonreuters.com.

Berge Olympus, a Newcastlemax bulker ship fitted with four WindWings, sails Singapore waters. REUTERS/Jeslyn Lerh

Business groups have criticized new and proposed climate-disclosure requirements, at the state and federal levels, saying they will impose new costs on companies to prepare emission reports.
    
Many firms already issue this data, providing a measure of what others can expect to pay. The most detailed figures I've seen come from a 2022 survey that put average spending at $533,000 by companies already making disclosures that would be required under proposals from the U.S. Securities and Exchange Commission (SEC). 
    
Several analysts told me that figure is comparable to the spending companies will have to make under the new California requirements - hardly a lot of money for big firms that, in many cases, already issue similar reports. (Here's one from Apple for instance)
    
"About two-thirds of the companies out there can get this data with an additional investment that probably amounts to what they spend on a big holiday party," said Elizabeth Saunders, a strategic advisor at Riveron, which provides climate risk management and consulting services.

Findings of the survey from ERM Group's "SustainAbility Institute" have gotten new life since Newsom on Oct. 7 signed two bills setting out new obligations for companies operating in the largest U.S. state.
    
The first bill, SB253, calls on companies with more than $1 billion in revenue to disclose scope 1 and scope 2 emissions plus so-called "scope 3" emissions like those resulting from use of their products. The second bill, SB261, requires companies with $500 million or more in revenue doing business in California to report on risks stemming from climate change such as rising sea levels or extreme weather.

The laws overlap with a proposed SEC rule that would require some Scope 3 reporting and which the agency says would cost companies around $530,000 per year. The SEC has delayed finalizing the rule as top business groups have sought to narrow its requirements, worried the agency's cost estimate is too low.

Some U.S. lawmakers have argued that passage of SB253 basically eliminates the cost of meeting a Scope 3 federal disclosure requirement for companies operating in California, which includes a large share of top U.S. stock issuers. 

Neither Newsom nor the California Chamber of Commerce commented on the ERM study. As Newsom signed the bills on Oct. 7, he said he was concerned about costs and would look to streamline requirements.

Democratic State Senator Henry Stern, one of the bill sponsors, said the ERM figure of $533,000 was "as good an estimate as any" of the combined costs of the new laws to businesses. But many companies have already embraced such spending and the laws should actually drive down expenses by making climate reporting routine, he told me in an interview.
    
Julie Gorte, senior vice president at Impax Asset Management, said the $533,000 figure is "in the ballpark" for what most companies would wind up spending on the new California requirements, if they are not already issuing such reports. "The interesting thing is that for small companies it could cost a lot less because they have less to report," Gorte said.
    
ERM's survey was based on 39 responders with market capitalizations ranging from less than $1 billion to over $200 billion.

Wind turbines spin during a winter storm near Palm Springs, California U.S. REUTERS/Mike Blake

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