Good morning. California is poised to force many private businesses to report on carbon emissions, dramatically increasing the number of U.S. companies that could be subject to some kind of U.S. climate reporting.

The number of companies that would be subject to the disclosure requirements could be far larger than the number that would be caught under a similar disclosure rule proposed by the Securities and Exchange Commission, which doesn’t directly oversee privately held businesses.

• $1 billion threshold: The law would require businesses, including those privately held, to begin reporting on emissions if they operate in California and have at least $1 billion in revenue. In addition to their direct emissions, those businesses would have to account for emissions by suppliers and customers, so-called “Scope 3” emissions that are considered more nebulous and difficult to pin down.
   
• More than just compliance costs: Those private companies won’t only bear the direct cost of the new carbon accounting requirements, but also the potential reputational damage as their environmental impacts come to light. It could also disrupt what is known as “brown spinning,” in which public companies spin off high-emitting assets to private companies that can profit from them with less scrutiny.
   
• Thousands of companies impacted: Around 5,300 businesses could be subject to the reporting requirements, including more than 3,900 privately held companies, according to estimates from Scott Wiener, the California state senator who put forward the legislation.

The WSJ Pro Sustainable Business Forum on Oct. 12 will include a discussion about risk and resilience in corporate sustainability programs with Maryam Golnaraghi, director of climate change and environment at The Geneva Association and Torolf Hamm, head of physical catastrophe and climate risk management at Willis Towers Watson.

Other sessions will cover reporting to U.S. and European standards, the role of artificial intelligence and what corporate decarbonization measures are proving effective. Register here.

3M agrees to pay nearly $10 million over sale of products to Iran.

3M has agreed to pay more than $9.6 million to settle a probe by the U.S. Treasury Department into sales to an Iranian entity controlled by the country’s law enforcement forces.

3M came forward to disclose the conduct and cooperated throughout the investigation, OFAC said, adding the company had fired several employees and cut off a Germany-based intermediary involved in the sales.

FTC sues large private-equity-backed anesthesia provider.

The Biden administration’s antitrust cops sued one of the country’s biggest anesthesiology providers on Thursday, launching a novel assault on Wall Street ownership of healthcare companies.

The Federal Trade Commission’s lawsuit against U.S. Anesthesia Partners is one of the first challenges of a private-equity strategy known as a roll-up, in which smaller companies in the same industry are bought up and combined to create a more powerful competitor.

• Microsoft cleared the biggest regulatory hurdle​ in its $75 billion pursuit of Activision Blizzard after U.K. authorities said in a preliminary decision that the modified deal for the games giant had resolved most of its antitrust concerns.
   
• Union Pacific recently furloughed 138 rail-yard workers, drawing the ire of the Federal Railroad Administration, the industry’s safety regulator.

Higher interest rates not just for longer, but maybe forever.

On Wednesday, Federal Reserve officials surprised markets by signaling interest rates won’t fall as much as previously planned.

The tweak might be more important than it looks. In their projections and commentary, some officials hint that rates might be higher not just for longer, but forever. In more technical terms, the so-called neutral rate, which keeps inflation and unemployment stable over time, has risen.

This matters to any investor, business or household whose plans depend on interest rates over a decade or longer. It could explain why long-term Treasury yields have risen sharply in the past few months, and why stocks are struggling.

McCarthy sends Republicans home after losing ‘shock’ vote in House.

House Speaker Kevin McCarthy (R., Calif.) threw in the towel on further votes this week, sending lawmakers home after GOP holdouts derailed his latest effort to advance legislation funding the federal government.

The collapse of a procedural motion to advance the $826 billion defense appropriations bill, days after another failed vote on the same bill, pointed to how the House, with McCarthy its leader, has become legislatively paralyzed.

• The Bank of England left its key interest rate unchanged for the first time since November 2021 amid signs that inflation is cooling and the U.K.’s economy is teetering on the brink of contraction.
   
• Two prototype U.S. drone ships have arrived in Japan for their first deployment in the western Pacific, testing surveillance and attack capabilities that the Navy might find useful against China’s larger fleet.
   
• Volodymyr Zelensky got the pomp and circumstance of a close ally visiting Washington, but intimate meetings with U.S. leaders couldn’t mask the new reality that Ukraine’s war with Russia is proving a tougher sell to his Western backers.

• “The worst thing we can do is something that would cause our core Hispanic consumers to say, ‘That’s not my Modelo,’” said Greg Gallagher, Modelo Especial’s vice president overseeing brand marketing on its strategy that helped overtake Bud Light in U.S. sales.
   
• The bid to free private-equity managers from regulatory oversight may not be a long shot. 
   
• Thanks to disaster relief offered by the IRS, companies in California have been allowed to put off this year’s federal tax payments until October. It’s helped plump some balance sheets.
   
• Small-time crypto traders who invested with Celsius Network have been going toe-to-toe with legal and financial heavyweights in the platform’s bankruptcy case—and notching some unlikely victories.

• The head of the virtual currency unit at the New York State Department of Financial Services is leaving the agency.

• Rupert Murdoch is stepping down as chair of Fox and News Corp, after building a media empire over seven decades that revolutionized news and entertainment and made him one of the world’s most influential and controversial tycoons.
   
• Cisco Systems has struck a $28 billion deal to buy analytics and security-software company Splunk as the networking-equipment giant looks to tap further into the rise of artificial intelligence.
   
• A growing wave of migration that has been building at the U.S.-Mexico border for the past few months is exploding in the small Texas city of Eagle Pass. Mexican railroad company Ferromex said it suspended freight operations on several lines serving border cities following a surge in the number of migrants jumping on the trains.
   
• Diageo has unexpectedly replaced its head of North America as the company’s chief executive tries to jump-start growth in the U.S., the Johnnie Walker maker’s largest market.
   
• India’s parliament has approved landmark legislation that will reserve one-third of seats for women in the lower house of parliament and state assemblies.
   
• Choosing an anonymous sperm donor has never been easy. But it used to be a lot cheaper.

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