Gov. Gavin Newsom (D-CA) signed a sweeping new law Saturday that will require all large companies operating in the state to disclose their greenhouse gas emissions.

Newsom signed the law, SB-253, on Saturday. It states that by 2025, California regulators must draft rules requiring all public and private companies whose annual profits exceed $1 billion to disclose both their direct and indirect greenhouse gas emissions. This includes any emissions from buildings or stores operated by the companies, as well as any work-related employee travel or transportation emissions incurred from shipping their products.

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More than 5,300 companies in the state currently stand to be affected by SB-253, including major players such as Apple, Amazon, Chevron, and Wells Fargo.

Failure to comply will result in fines of up to $500,000 per year, according to the legislation.

By 2027, the law goes further, requiring the companies to disclose all “scope 3” emissions generated by their supply chains or by consumers who use their products, a critical consideration for energy companies.

Newsom said in a signing statement that the new disclosure law “demonstrates California’s continued leadership with bold responses to the climate crisis [and] turning information transparency into climate action.”

Still, he acknowledged the financial risks associated with the law’s ambitious timeline. In the signing statement, he urged the California Air Resources Board to monitor and work with the state legislature to address any harmful costs posed to companies.

Also on Saturday, Newsom signed into law a companion bill, SB-261, that requires all companies with more than $500 million in annual profits to disclose any climate-related financial risks every other year, beginning in 2026.

Failure to meet those reporting requirements will result in penalties of up to $50,000 annually, Newsom said.

The laws have sparked criticism from some companies as well as the California Chamber of Commerce.

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The group’s president and CEO, Jennifer Barrera, criticized the legislation on Twitter on Saturday, noting that they introduce “major changes in climate policy” and “will add considerable obligations on affected businesses.”

“We looked forward to working with the governor’s office on SB-253 clean-up legislation that will address some of the major concerns of our members, particularly the impact on small business,” she added.