'Free speech right to hide pollution'?: Court halts California rule to disclose major sources

A federal appeals court in California ruled that a landmark state law requiring major companies to report most of their heat-trapping pollution was "likely unconstitutional."

Here's what to know

California's 2023 climate law would have required businesses with annual revenues above $1 billion to begin reporting their Scope 3 emissions next year. 

The San Francisco-based Ninth Circuit Court of Appeals put that requirement on hold Monday. The court ruled that the provision was "likely unconstitutional" because forcing disclosure would compel speech in violation of the First Amendment. 

More background

Air pollution from human activities has contributed to rising global temperatures, intensifying extreme weather events that threaten local economies and public health. 

As The Lever detailed, Scope 3 emissions are the largest category of corporate emissions, including for banks, which frequently back fossil fuel projects. 

These emissions include indirect greenhouse gas pollution from a company's value chain, from shipping and manufacturing to consumer product use. For a fossil fuel company, Scope 3 pollution could come from a coal plant generating electricity to vehicles used for travel.

However, Scope 3 pollution is missing from most companies' climate pledges. According to The Lever — which dubbed the ruling "a 'free speech' right to hide pollution" — banks, private equity firms, and fast-food restaurants such as In-N-Out Burger opposed the law. 

The appeals court also put on hold a law that would have required businesses with annual revenues above $500 million to report climate-change risks. 

Where can I learn more?

The fight over California's disclosure law is one of several legal battles over pollution and public access to information. 

• Chevron's lawsuits helped delay a refinery pollution fix ordered in Richmond in 2021.

• A California group sued the EPA over withheld air-quality records concerning Los Angeles residents.

• In Michigan, DTE asked a court to erase a $100 million fine for sulfur pollution.

• Washington House Republicans pushed legislation to shield fossil fuel companies from climate lawsuits.

• A judge blocked New Mexico's PFAS labeling rule, calling it "a warning in disguise."

Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.