California adopts two laws requiring climate disclosures
California adopts two laws requiring climate disclosures
On 7 October 2023, California Governor signed SB 253 - Climate Corporate Data Accountability Act and SB 261 - Greenhouse gases: climate-related financial risk.
SB 253 requires companies with revenues greater than $1 billion that do business in California to report annually on their Scope 1, Scope 2, and Scope 3 emissions based on the GHG Protocol.
The law provides for:
The laws will now be implemented by the California Air Resources Board, which needs to pass regulations by 1 January 2025, before companies start filing disclosures in 2026.
SB 253 requires companies with revenues greater than $1 billion that do business in California to report annually on their Scope 1, Scope 2, and Scope 3 emissions based on the GHG Protocol.
The law provides for:
- Disclosure obligations that would begin in 2026 for Scope 1 and 2 emissions, and in 2027 for Scope 3 emissions.
- Third party assurance for companies’ emissions reporting, with a limited assurance beginning in 2026 for Scope 1 and 2 emissions, and reasonable assurance in 2030.
- A limited assurance level for Scope 3 beginning in 2030.
The laws will now be implemented by the California Air Resources Board, which needs to pass regulations by 1 January 2025, before companies start filing disclosures in 2026.