With Governor Newsom poised to sign two new climate reporting bills into law, we look at what’s in them, why they matter, and why everyone is suddenly making a fuss about Scope 3 emissions.

Investors’ ability to make comprehensive assessments of companies’ climate profiles relies on being able to analyze trustworthy corporate disclosures of greenhouse-gas emissions. Yet the current state of disclosures remains challenging.

Reporting on Scope 3 emissions continues to raise challenges for companies and institutional investors due to poor disclosure, data incompleteness and high volatility. Yet, these indirect upstream and downstream emissions tend to represent the largest share of a company’s – or a portfolio’s – total emissions. This report highlights the importance of comparable Scope 3 estimates when managing climate change risks facing investment portfolios.