Last time, we looked briefly at a legislative proposal that would entail a new scheme for the regulation of carbon emissions in California. As we noted, the state of California is particularly strict when it comes to environmental regulations, and environmental compliance is an important aspect of doing business.

When it comes to compliance with carbon emissions, there is a sort of baseline that businesses are required to meet, at both the federal and the state level. Compliance with these requirements is important, but there is also the potential for companies to take environmental compliance further. 

Many companies have begun implementing greenhouse gas accounting procedures, even companies that aren’t required to do so by law. Businesses going this route take different approaches to accounting, but the net effect is that there is a growing expectation among companies that they are engaging in this type of accounting.

Why would businesses voluntarily account for greenhouse emissions, even when they aren’t required to do so by law? Accounting for greenhouse gas emissions allows companies, among other things, to evaluate whether their products or planned projects would be feasible under future environmental regulations, and to identify areas of production where costs can be saved.

As some have pointed out, though, while companies may be motivated to track greenhouse emissions for the sake of efficiency, there is still the issue of how to encourage companies to reduce greenhouse emissions for the sake of the environment.  It is possible that pressure from investors could change companies’ motivation to reduce greenhouse emissions, but for now, companies can at least find motivation in regulatory requirements and the potential to increase efficiency. When it comes to regulatory compliance, of course, an experienced attorney can help provide expert guidance and advocacy for any issues that need to be addressed.