How California’s Climate Disclosure Bills Could Affect Your Company
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September 12, 2023
min read

How California’s Climate Disclosure Bills Could Affect Your Company

By starting the reporting process now, companies can get ahead of regulations and leverage climate data to help

With investors, regulators, and consumers demanding climate accountability, California has introduced two new bills—SB 253 and SB 261— that would mandate climate disclosures for thousands of companies. If passed, these bills would enact broad new reporting rules around greenhouse gas (GHG) emissions and climate-related risks.

SB 253: Sweeping Emissions Disclosure

SB 253, also known as the Climate Corporate Data Accountability Act, would require expansive emissions reporting for large companies operating in California. Here are the key details:

Which Companies Are Affected?

SB 253 applies to U.S. companies that:

  • Generate over $1 billion in annual revenue
  • Do business in California

What Do Companies Have to Disclose?

Affected companies must report annual GHG inventories covering:

  • Scope 1 emissions
  • Scope 2 emissions
  • Scope 3 emissions

Reporting must follow the globally recognized GHG Protocol methodology.

When Do Disclosures Start?

If passed, disclosures of scope 1 and 2 emissions would likely begin in 2024. Scope 3 disclosures would follow in 2025 or later.

Verification and Penalties

SB 253 also mandates third-party verification of emissions reports. Non-compliant companies face potential penalties from California regulators.

Over 7,000 corporations could see new emissions disclosure rules under SB 253. Many companies with international operations are already preparing to report for incoming EU sustainability regulations.

SB 261: Climate Risk Reporting

SB 261, known as the Climate-Related Financial Risk Act, focuses on climate risk management. Here are the key provisions:

Which Companies Are Affected?

SB 261 applies to companies with over $500 million in annual revenue that operate in California.

What Do Companies Have to Disclose?

Affected companies must publish annual climate risk reports aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) framework.

Reports must cover:

  • Physical climate risks
  • Climate transition risks
  • Efforts to reduce climate-related risks

Verification and Penalties

Third-party assurance of the reports would also be required under SB 261. Failing to comply can result in penalties.

Preparing for New Climate Disclosure Rules

Leading companies are already reporting emissions and climate risks to satisfy major investors and regulators in markets like the EU.

In the face of these sweeping regulation changes with SB 253 and SB 261, 15Rock can be your key to not just compliance but also strategic risk management and emissions tracking. With the robust capabilities of our AI-enabled services through Athena, we provide granular insights into climate risks and emissions.

Our platform offers businesses the ability to access TCFD compliant reports, creating a seamless implementation of climate-related financial disclosure strategies. Athena's real-time monitoring also allows for constant calibration to accommodate potential legislative updates. Moreover, with Athena's robust system, you can disclose your scope 1, 2, and 3 emissions with unparalleled accuracy, helping meet the regulatory requirements of SB 253 and beyond. Embrace the upcoming regulations as an opportunity to transform risks into sustainable growth strategies with 15Rock.

Let's navigate the future of climate disclosure together - a transparent future where compliance meets sustainability. You can get started for free and stay on our free tier until you need AI super powers.