Climate Disclosure Reporting Requirements Hurt Small Businesses Without Environmental Improvements
Lawmakers in Albany want to be seen as national leaders on the environmental front—even if that means making life harder for the small businesses that form the backbone of New York’s economy. The recently introduced Climate Corporate Data Accountability Act (CCDAA) is the latest in a series of misguided policy efforts that create heavy regulatory burdens with minimal environmental benefit.
At the core of the CCDAA is a sweeping emissions reporting mandate for companies with annual revenues over $1 billion. These businesses would be required to publicly disclose their Scope 1, Scope 2, and Scope 3 greenhouse gas (GHG) emissions. Scope 1 and 2 emissions cover direct emissions and those from purchased energy, respectively. But Scope 3 goes much further, encompassing emissions from an entire value chain, including suppliers and logistics—many of which operate outside of New York, or even outside the country.
Supporters argue the CCDAA only targets large corporations. In practice, though, the proposal would indirectly, and presumably unintentionally, significantly burden small businesses. Since large companies would be held accountable for emissions up and down their supply chains, those new reporting requirements would in turn trickle down to their vendors—including the countless small “Mom and Pop” businesses that provide goods and services across the economy. These smaller firms would face pressure to calculate and disclose their own emissions or risk losing business. It’s a trickle-down regulation that ends up soaking Main Street.
New York is home to nearly 500,000 small businesses that help keep Empire State residents employed. Together, they employ more than 3 million people—about 40 percent of the state’s private-sector workforce—and contribute close to half of the state’s GDP. These businesses are not just economic engines; they are deeply woven into the fabric of local communities. Every dollar spent at a small business recirculates in the local economy, supporting schools, infrastructure, and services. These businesses deserve support, not sweeping mandates that force them to divert resources from serving customers to navigating emissions tracking systems.
Scope 3 reporting is not just complex—it’s practically unworkable for smaller businesses. The methodologies for calculating these emissions are not standardized, and the bill does little to offer clarity. Two similar businesses using different estimation models could report dramatically different figures, leading to confusion and undermining the data’s
credibility. More importantly, many small businesses don’t have the expertise or budget to undertake such analysis, meaning they’ll need to hire costly consultants or invest in new systems—an expense they cannot afford.
According to a recent survey by the National Federation of Independent Business, 92 percent of small business owners in New York oppose GHG disclosure requirements for themselves or their partners. This opposition reflects real concern over the feasibility of complying with such mandates. These businesses aren’t “climate deniers”—they’re realists. They know that new bureaucratic hurdles won’t lower global temperatures; they’ll just make it harder to stay in business.
Adding to the confusion, the New York Department of Environmental Conservation (NYDEC) released its own emissions reporting rule in March 2025, targeting many of the same companies covered by the CCDAA. This duplication of regulatory efforts—on similar timelines, no less—means businesses could face overlapping requirements, unclear standards, and mounting compliance costs.
One-size-fits-all mandates rarely work in diverse economies, and the CCDAA is no exception. This proposal will increase the cost of doing business in New York at a time when many small businesses are still reeling from inflation, labor shortages, and rising rents. It contradicts every stated goal of fostering entrepreneurship and supporting the state’s economic recovery.
Rather than adopt another top-down mandate, New York lawmakers should pursue policies that are both environmentally effective and economically practical. The state should focus its efforts elsewhere rather than forcing small businesses to hire consultants to count the carbon footprint of a delivery.
The CCDAA may look like climate leadership on paper, but in practice it will likely lead to confusion, cost increases, and compliance chaos. Policymakers should take a hard look at this idea—and rethink the merit of a strategy that punishes the very businesses that make New York’s economy run. Small businesses want to help be an answer; however, they can only be part of the solution if they’re still around to help.
Ashley Ranslow is New York state director for the National Federation of Independent Business (NFIB)
