Good morning. California legislators have passed a bill, the first of its kind in the nation, that would require large companies that do business there to disclose all emissions tied to both their operations and supply chain.

The bill, which received final passage in the state Senate Tuesday, now heads to the desk of Gov. Gavin Newsom who hasn’t yet taken a position on the bill.

• What's in the bill? Under the proposal, known as SB 253, businesses with $1 billion or more in annual revenue that operate in California would be required to calculate and report to the state a wide range of emissions, including those produced at facilities they own and control directly as well as those tied to suppliers’ operations, employee commutes and business travel.
   
• Scope 3 controversy: Inclusion of such indirect emissions, better known as “Scope 3,” became the main point of contention for industry groups, which argued that accurately measuring such outputs would be nearly impossible.
   
• Gensler weighs in on SEC climate rule: Meanwhile, Risk & Compliance Journal's Richard Vanderford reports that SEC Chair Gary Gensler is declining to give a timeline for when the agency's own climate-related disclosure rule might move forward. 
   
• SEC's focus on Scope 3: Gensler said the SEC is in particular focusing on how to handle what is known as Scope 3 reporting, the tracking of indirect emissions caused by a company’s supply chain or customers. “We try not to do things against a clock,” Gensler told lawmakers in an oversight hearing Tuesday before the Senate Banking Committee. “It’s really when the staff is ready.”

🎧 New to our WSJ Special Access podcast series: Listen to Paul Snyder, the executive vice president of stewardship at Tillamook County Creamery Association, in an interview with Risk & Compliance Journal's Richard Vanderford about the debate over the role of ESG in business.

Google’s antitrust trial to set ‘future of the internet,’ DOJ says.

Google paid huge sums to cement its dominance in internet search, shut out competitors and stifle innovation, the Justice Department alleged Tuesday in kicking off the biggest antitrust trial in more than two decades.

What's at stake? The ruling in the nonjury trial, scheduled to go through mid-November, will come from U.S. District Judge Amit Mehta, who could order a breakup or changes to the way Google, a unit of Alphabet, promotes its search engine.

Big businesses should disclose China risks, ex-SEC chairman says.

The largest U.S. public companies should be forced to disclose their exposure to China and weigh how an “abrupt decoupling” might play out, former Securities and Exchange Commission Chairman Jay Clayton told lawmakers Tuesday.

Large companies with significant China footprints should be required to lay out for investors the extent of their exposure to China and the expected effects on operations and business of a substantial disruption to U.S.-China relations, Clayton said in testimony before the U.S. House of Representatives Select Committee on the Chinese Communist Party.

• The Securities and Exchange Commission sued Virtu Financial, one of the country’s largest trading firms, alleging it misled customers about how it safeguarded their confidential trading data.
   
• BP CEO Bernard Looney resigned abruptly Tuesday over past relationships with colleagues, the company said, less than four years after taking over the London-based oil giant.
   
• The SEC is fining a former Marcum auditor $75,000 over alleged deficiencies in the accounting firm's quality control system.

Banks load up on risky ‘hot’ deposits.

At midyear, Zions Bancorp reported holding $8.5 billion in brokered deposits, an obscure but costly banking industry product that is drawing attention from regulators. At this time last year, the Salt Lake City-based bank had practically none.

Fickle depositors? Many industry players view brokered deposits as a double-edged sword. They can be a quick and easy way for a bank to shore up its balance sheet. Regulators and bankers say they are also a type of “hot” money that is prone to disappear when a bank hits a rough patch, since these yield-seeking customers don’t tend to be loyal.

U.S. incomes fall for third straight year.

Surging inflation gobbled up household income gains last year, making 2022 the third straight year in which Americans saw their living standards eroded by rising prices and pandemic disruptions.

Consumers struggling. The figures add to the picture of the economic challenges facing households since Covid-19 hit in early 2020. Inflation hit a four-decade high last summer as the pandemic upended supply chains and the Ukraine war drove up energy prices.

• A Chinese aircraft carrier and around two dozen other Chinese warships were gathering in the western Pacific, according to authorities in Taiwan and Japan, an unusually large group, suggesting Beijing may be planning major naval exercises.
   
• China’s sluggish economy is driving cash-strapped local governments to seek unconventional sources of revenue. Their law enforcers have emerged as some of their biggest earners.

MGM Resorts hotel, betting operations disrupted by cyber incident.

MGM Resorts International shut down some of its computer systems after experiencing what it described as a cybersecurity issue that affected hotel and casino operations.

Why would they be a target? Hotels and casinos are potentially lucrative targets for hackers because of the amount of personal and financial data they collect from customers.

• Speaker Kevin McCarthy said House committees would open a formal impeachment inquiry into President Biden, ramping up GOP efforts to unearth any evidence of wrongdoing ahead of the 2024 elections.
   
• Libyan authorities struggled to reach survivors and provide food, water and shelter to tens of thousands of people after a lethal storm that officials say likely killed thousands in the country’s worst natural disaster in decades.
   
• Russian President Vladimir Putin on Tuesday waded into the debate over the criminal charges faced by Republican election candidate Donald Trump, saying the cases against the former U.S. president amount to political “persecution” and expose U.S. weakness.
   
• The Centers for Disease Control and Prevention endorsed Covid-19 boosters for everyone six months old and above, as cases increase heading into the fall months.
   
• Lawyers representing Dow Jones, publisher of The Wall Street Journal, requested that a United Nations group declare reporter Evan Gershkovich arbitrarily detained and asked it to appeal to Russia to release him immediately.

Follow us on X at @WSJRisk. Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun, Dylan Tokar @dgtokar and Richard Vanderford @VanderfordRich.

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