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by: Jacob Wills | October 17, 2023

On September 12, California’s legislature passed two landmark climate disclosure laws. Senate Bill 253, the Climate Corporate Data Accountability Act, and Senate Bill 261, the Climate-Related Financial Risk Act, require disclosures of greenhouse gas (GHG) emissions and climate risk for California companies exceeding certain revenue thresholds. On October 7, Governor Gavin Newsom signed both bills into law.

Here are some key points on each bill: 

Some key pieces of both laws will need clarification during the rulemaking process. At the forefront are those raised by the Governor around the implementation deadlines and reporting challenges. The Governor has instructed the California Air Resources Board (CARB), the agency tasked with implementing the program, to monitor the financial impact on businesses closely. Additionally, policymakers will have to define what it means to conduct business in California and provide guidance on reporting in a manner “easily understandable and accessible” for stakeholders. 

The passage of these laws in California could impact the SEC rulemaking process. Since thousands of companies would already be required to report under the California disclosure laws, the cost-benefit analysis for the SEC rule would improve, making it easier to issue a final rule. As it stands, the SEC is expected to vote on the climate disclosure rule by the end of October. 

Our Sustainability, Policy, and Advisory team is equipped to answer questions related to these new laws and help companies prepare for compliance. Contact us today at info@climeco.com or through our contact page.

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