{{item.videoDuration}}
{{item.title}}
{{item.text}}
{{item.videoDuration}}
{{item.text}}
California’s climate laws represent a defining moment for many companies. With the passage of SB 253 and SB 261, as modified by SB 219, many companies are facing their first regulatory climate disclosure mandates in the US. These laws apply to both public and private companies and require disclosure of greenhouse gas emissions and climate-related financial risks.
The California Air Resources Board (CARB) — the agency tasked with responsibility for rulemaking development, implementation and enforcement — is moving to transform voluntary disclosure frameworks into regulatory grade standards. Companies in scope of the state’s laws will need to disclose a climate-related financial risk report by January 1, 2026 and scope 1 and scope 2 emissions in 2026, with independent third-party limited assurance. Scope 3 emissions reporting begins in 2027.
The central challenge? While companies know what they will need to disclose, they still do not know key details. These laws describe preparing disclosures in accordance with the Greenhouse Gas Protocol and the Task Force on Climate-Related Financial Disclosures’ 2017 Guidance and the International Sustainability Standards Board’s S2 Climate-Related Disclosures. But CARB is still discussing how to define key terms such as “revenue” and “doing business in California,” which may impact which companies are in scope.
As companies also prepare for compliance with other global regulations like the Corporate Sustainability Reporting Directive (CSRD), California’s timeline leads to a predicament: Organizations risk being caught flat-footed if they wait for every detail to crystalize.
Reporting Your next climate reporting moves
Companies should evaluate and formalize their processes and build systems and capabilities that give them flexibility for whatever the details of compliance look like. That includes identifying where practices fall short, pressure-testing processes, taking climate risk assessments through internal audit review and designing reporting programs that are interoperable and support a single source of data that can be used to satisfy multiple disclosure requirements.
Wherever companies are on their sustainability journeys, these four no-regrets moves can help them navigate uncertainty and build climate reporting that’s ready for California and beyond.
Reporting California may be the first test. It won’t be the last.
The reporting challenges companies face today are only the beginning. In the absence of a federal standard, other states may follow California’s lead and try to enact their own climate-related disclosure laws increasing the risk of patchwork regulation.
But the real shift is this: companies will be pushed to disclose, and to do so with higher-quality, decision-useful information that investors are demanding. California’s rules set the tone for a broader wave of transparency, one that could reshape how markets evaluate risk and resilience.
Don’t look at California’s legislation as just another compliance exercise. It’s the spark to build repeatable, auditable, interoperable sustainability reporting capabilities, ones that can make your business faster, smarter and more resilient
{{filterContent.facetedTitle}}
{{contentList.loadingText}}
{{contentList.loadingText}}
Contact us
Follow us
