HB4268 103RD GENERAL ASSEMBLY

LRB103 34148 SPS 63966 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB4268

Introduced 1/16/2024, by Rep. Kimberly du Buclet

SYNOPSIS AS INTRODUCED:

New Act

Creates the Climate Corporate Accountability Act. Provides that, on or before July 1, 2024, the Secretary of State shall develop and adopt rules to require a reporting entity to annually disclose to the emissions registry, and verify, all of the reporting entity's scope 1 emissions, scope 2 emissions, and scope 3 emissions. Provides that a reporting entity, starting on January 1, 2025, and annually thereafter, publicly disclose to the emissions registry all of the reporting entity's scope 1 emissions and scope 2 emissions for the prior calendar year, and its scope 3 emissions for that same calendar year no later than 180 days after that date. Provides that the Secretary of State shall contract with an emissions registry to develop a reporting and registry program to receive and make publicly available disclosures. Provides that, on or before January 1, 2025, the Secretary of State shall contract with the University of Illinois, a national laboratory, or another equivalent academic institution to prepare a report on the public disclosures made by reporting entities to the emissions registry. Provides that the emissions registry, on or before January 1, 2025, shall create a digital platform, which shall be accessible to the public, that will house all disclosures submitted by reporting entities to the emissions registry. Provides for enforcement of the Act. Effective immediately.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Climate Corporate Accountability Act.

Section 5. Definitions. As used in this Act:

"Emissions registry" means a nonprofit emissions registry organization contracted by the Secretary of State that:

(1) currently operates a voluntary greenhouse gas emission registry for organizations operating in the United States; and

(2) has experience with voluntary greenhouse gas emissions disclosure by entities operating in Illinois.

"Reporting entity" means a partnership, corporation, limited liability company, or other business entity formed under the laws of this State, the laws of any other state of the United States or the District of Columbia, or under an act of the Congress of the United States with total annual revenues in excess of $1,000,000,000 and that does business in Illinois.

"Scope 1 emissions" means all direct greenhouse gas emissions that stem from sources that a reporting entity owns or directly controls, regardless of location, including, but not limited to, fuel combustion activities.

"Scope 2 emissions" means indirect greenhouse gas emissions from electricity purchased and used by a reporting entity, regardless of location.

"Scope 3 emissions" means indirect greenhouse gas emissions, other than scope 2 emissions, from activities of a reporting entity that stem from sources that the reporting entity does not own or directly control and may include, but are not limited to, emissions associated with the reporting entity's supply chain, business travel, employee commutes, procurement, waste, and water usage, regardless of location.

Section 10. Emissions reporting.

(a) On or before July 1, 2024, the Secretary of State shall develop and adopt rules to require a reporting entity to annually disclose to the emissions registry, and verify, all of the reporting entity's scope 1 emissions, scope 2 emissions, and scope 3 emissions. The Secretary of State shall ensure that the rules adopted under this subsection require, at a minimum, all of the following:

(1) That a reporting entity, starting on January 1, 2025, and annually thereafter, publicly disclose to the emissions registry all of the reporting entity's scope 1 emissions and scope 2 emissions for the prior calendar year, and its scope 3 emissions for that same calendar year no later than 180 days after that date, using the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard and the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard developed by the World Resources Institute and the World Business Council for Sustainable Development, including guidance for scope 3 emissions calculations that detail acceptable use of both primary and secondary data sources, including the use of industry average data, proxy data, and other generic data in its scope 3 emissions calculations. On or before July 1, 2029, the Secretary of State shall review, and update as necessary, the public disclosure deadlines to evaluate trends in scope 3 emissions reporting and consider changes to the disclosure deadlines to ensure that scope 3 emissions data is disclosed to the emissions registry as close in time as practicable to the deadline for reporting entities to disclose scope 1 emissions and scope 2 emissions data. The reporting timelines shall consider industry stakeholder input and shall take into account the timelines by which reporting entities typically receive scope 1, scope 2, and scope 3 emissions data, as well as the capacity for independent verification to be performed by a third-party auditor, as approved by the Secretary of State.

(2) That a reporting entity's public disclosure is made in a manner that is easily understandable and accessible to residents of the State.

(3) That a reporting entity's public disclosure includes the name of the reporting entity and any fictitious names, trade names, assumed names, and logos used by the reporting entity.

(4) That a reporting entity's public disclosure is structured in ways that maximize and streamline reporting and ease of use in meeting the requirements of national and international disclosure programs and standards, including, but not limited to, adopted rules from the United States Securities and Exchange Commission and international standards, such as those established by CDP Global.

(5) That a reporting entity's public disclosure is independently verified by the emissions registry or a third-party auditor, that is approved by the Secretary of State, with expertise in greenhouse gas emissions accounting. The reporting entity shall ensure that a copy of the complete, audited greenhouse gas emissions inventory, including the name of the approved third-party auditor, is provided to the emissions registry as part of or in connection with the reporting entity's public disclosure. The Secretary of State shall establish auditor qualifications and a process for approval of auditors that ensures sufficient auditor capacity, as well as timely reporting implementation as required under paragraph (1).

(b) The Secretary of State shall contract with an emissions registry to develop a reporting and registry program to receive and make publicly available disclosures as described in paragraph (1).

(c) The Secretary of State may adopt any rules that it deems necessary and appropriate to implement this Section.

(d) In developing the rules required under this Section, the Secretary of State shall consult with all of the following:

(1) the Attorney General;

(2) other government stakeholders, including, but not limited to, experts in climate science and corporate carbon emissions accounting;

(3) stakeholders representing consumer and environmental justice interests; and

(4) reporting entities that have demonstrated leadership in full-scope greenhouse gas emissions accounting and public disclosure and greenhouse gas emissions reductions.

Section 15. Report on public emissions disclosures.

(a) On or before January 1, 2025, the Secretary of State shall contract with the University of Illinois, a national laboratory, or another equivalent academic institution to prepare a report on the public disclosures made by reporting entities to the emissions registry as described in Section 10 and the rules adopted by the Secretary of State pursuant to that Section. In preparing the report, consideration shall be given to, at a minimum, greenhouse gas emissions from reporting entities in the context of State greenhouse gas emissions reduction and climate goals. The entity preparing the report shall not require reporting entities to report any information beyond what is required under Section 10 or the rules adopted by the Secretary of State under that Section.

(b) The Secretary of State shall submit the report required by this Section to the emissions registry to be made publicly available on the digital platform required to be created by the emissions registry as described in Section 20.

Section 20. Emissions registry.

(a) The emissions registry, on or before January 1, 2025, shall create a digital platform, which shall be accessible to the public, that shall house all disclosures submitted by reporting entities to the emissions registry under the rules adopted by the Secretary of State under Section 10 and the report prepared for the Secretary of State as described in Section 15. The emissions registry shall make the reporting entities' disclosures and the Secretary of State's report available on the digital platform within 30 days after receipt.

(b) The digital platform shall be capable of featuring individual reporting entity disclosures, and shall allow consumers to view reported data elements aggregated in a variety of ways, including multiyear data, in a manner that is easily understandable and accessible to residents of the State. All data sets and customized views shall be available in electronic format for access and use by the public.

(c) Within 30 days after receipt, the emissions registry shall submit the report prepared for the Secretary of State as described in Section 15 to the General Assembly.

Section 25. Violations. If the Attorney General finds that a reporting entity has violated or is violating this Act, or upon a complaint received from the Secretary of State, the Attorney General may bring a civil action against that reporting entity seeking civil penalties for violations of this Act.

Section 30. Severability. The provisions of this Act are severable. If any provision of this Act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

Section 99. Effective date. This Act takes effect upon becoming law.