California has taken significant steps to stake out its leadership position in the climate disclosure arena. On September 12, 2023, SB 253, the Climate Corporate Data Accountability Act, was passed by the Senate after already having been passed by the State Assembly. And on September 20, SB 261, known as the Greenhouse gases: climate-related financial risk bill, was sent to the Governor for signature. Governor Newasome signed both bills on October 7.
Section 1 of the Climate Corporate Data Accountability Act is a manifesto – a statement of California’s climate change policy and goals as well as a roadmap for change. I encourage you to read Section 1 in full.
SB 253 will require U.S. companies doing business in California with annual revenues greater than $1 billion to:
- Disclose Scope 1, 2 and 3 greenhouse gas emissions annually, and
- Obtain third-party assurance of the disclosed emissions.
SB 261 will require U.S. companies (other than insurance companies) that do business in California and have annual revenues greater than $500 million to report biennially on their climate-related financial risks and measures adopted to reduce and adapt to such risks.
Both bills will require some climate disclosure as early as 2026, with of Scope 3 disclosures required beginning in 2027.
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