California legislature passes emissions reporting requirement (2023)
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As the SEC continues to work on its revamped emissions reporting rule, the state of California is moving forward with its efforts to require companies doing business in the state to document and report their carbon usage. The state legislature passed two bills proposing reporting requirements last week, which Gov. Gavin Newsom (D) said he will sign:
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Last week, the California Legislature passed two far-reaching climate disclosure bills – SB 253, the Climate Corporate Data Accountability Act (CCDAA), and SB 261, the Climate-Related Financial Risk Act (CRFRA) – together, the California Climate Accountability Package. The passage of these bills puts California in the position to implement first-of-its-kind mandatory climate disclosure in the US. While these bills are similar to the climate rule proposed by the Securities and Exchange Commission (SEC) in March 2022, the bills reach further on several fronts… Because the bills would apply to both public and private companies over certain revenue thresholds, they are expected to significantly broaden the number of companies required to publish public climate disclosures. Gov. Gavin Newsom has until October 14, 2023, to sign or veto the bills and, if he does neither, they will automatically become law – though he has indicated that he plans to sign both bills. In summary, SB 253 requires disclosure of and independent third-party assurance on all global greenhouse gas (GHG) emissions – Scopes 1, 2 and 3 – for any entity “doing business in California” with global annual revenues exceeding $1 billion. SB 261 requires disclosure of climate-related financial risks, in accordance with recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD), for entities doing business in California with global annual revenues exceeding $500 million. A discussion of the requirements of each bill, as well as a comparison to other climate disclosure rules, follows below. Although both bills provide broad outlines of climate reporting expectations, the California Air Resources Board will be responsible for developing implementing regulations, which will presumably contain more detailed reporting instructions. … The California Climate Accountability Package goes further than the SEC proposed climate rule, as it applies to both public and private companies that do business in the state and meet certain annual revenue thresholds. The SEC’s proposed climate rule targets only public companies reporting to the SEC, including US public companies and foreign private issuers.[1] |
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Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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