This page last reviewed December 14, 2018

Assembly Bill 32 and California’s Small Businesses

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Small businesses play an important role in California’s economy as they represent some 3.5 million businesses, 99.2% of California’s employers and 50.4% of the state’s private-sector labor force (source: SBA). California small businesses also play a critical role in reducing the impacts of climate change by contributing their share of greenhouse gas (GHG) emission reductions. AB 32, the California Global Warming Solutions Act, requires a reduction of statewide greenhouse gas emissions to 1990 levels by 2020 - a reduction of approximately 15 percent below emissions expected under a “business as usual” scenario.

As the lead agency implementing AB 32, the California Air Resources Board (ARB) adopted the Scoping Plan which lays out the strategies for California to achieve the necessary GHG reductions. All sectors of California’s economy, public, private, and individuals, must do their part to reduce GHG emissions in order to protect our economy and preserve our environment. 

Small Businesses Lead the Way

Small businesses are leading the way to a healthy future by taking actions to reduce their greenhouse gas emissions, save money, and grow their businesses. Sustainable practices such as energy, fuel, and water efficiency, along with material reuse and conservation, help reduce emissions and costs while conserving our natural resources.  Every business can take simple steps at little to no cost to become more sustainable.  For example, energy efficiency can be improved by adjusting the thermostat, using day lighting, unplugging equipment, or turning off computers.  Some actions take a little more effort and/or upfront costs (e.g., changing the lights, installing energy or water efficient appliances, driving alternative fuel or hybrid vehicles), but greater rewards typically require some additional commitments.  With a little bit of work, time, or money, your sustainable strategies will reduce the environmental impacts of your business, save money, and help position you for growth.


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A Small Business Toolkit was designed as part of the CoolCalifornia website to help businesses determine their carbon footprint, take actions to reduce their greenhouse gas emissions, learn what similar businesses have done, and save money. Toolkit components include tips on climate-friendly actions to take; a small business carbon footprint calculator; a Funding Wizard for financial incentives, grants, and rebates; case studies from different business sectors; and the CoolCalifornia Small Business Awards Program that recognizes businesses for reducing their GHGs and implementing sustainable practices.

Funding Assistance

Once you make a commitment to take action to reduce your GHG emissions, it is important to prioritize your actions and estimate the cost and payback period for each one. While some steps are very easy and cost very little to implement, other efforts will require up-front investment.  Rebates and incentives, including those offered by local utilities, are included in the Funding Wizard database; check your local utilities website for additional cost savings options.  Other small business financial resources and programs, including the California Business Incentives Gateway, the U.S. Small Business Administration, local air districts, and the California Capital Access Program (CalCAP), should also be considered, among others.

Success Stories and Case Studies

It is always helpful to see what other businesses have done to successfully reduce their emissions and improve their bottom line.  Case studies of California small businesses can be sorted by location or industry sector or type of action taken on the CoolCalifornia website; examples of energy efficiency actions can be found on the Energy Star website for small business.

Green Business Certification Programs

green business logoOnce you have experienced first-hand the environmental and economic benefits of reducing your carbon footprint, you may want to go further and become a certified Green Business. There are several sources of information and programs to learn about and/or get certified, including Sacramento County's Business Environmental Resource Center (BERC), Scientific Certification Systems, Green Seal, the Bay Area Green Business Program, and the California Green Business Program.

Related Research and Reports 

For questions or comments, please contact Ombudsman at (916) 323-6791 or toll free at 800-272-4572

Para asistencia en Espanol, llame (916) 324-1503