News Summary
California’s new climate disclosure laws, requiring companies to report greenhouse gas emissions and climate-related financial risks, have received strong public backing. According to a Ceres analysis, 59% of public commenters support the laws, which will enhance corporate transparency starting in 2026. The California Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act aim to improve accountability and compliance among companies operating in the state, potentially influencing other states to adopt similar measures.
California’s new climate disclosure laws have received robust public support as the California Air Resources Board (CARB) gears up for their implementation. An analysis conducted by the sustainability nonprofit Ceres reveals that 59% of public commenters expressed support for the laws, while only 9% opposed them. These laws, enacted in 2023, require companies operating in California to disclose greenhouse gas (GHG) emissions and monitor climate-related financial risks.
The California Climate Corporate Data Accountability Act (SB 253) mandates that companies with over $1 billion in revenue report their emissions publicly each year, starting in 2026. Concurrently, the Climate-Related Financial Risk Act (SB 261) requires companies generating more than $500 million in revenue to report their climate-related financial risks biennially, with reporting commencing in January 2026. Both acts aim to enhance transparency regarding corporate emissions and associated financial risks.
Ceres analyzed a total of 245 submissions sent to CARB regarding the new regulations, with 199 responses coming from various entities such as investors, businesses, and advocacy organizations. Key concerns highlighted by commenters included the need for global alignment of California’s regulations with international standards such as those established by the International Sustainability Standards Board (ISSB) and the EU’s Corporate Sustainability Reporting Directive. Commenters also requested clearer definitions of what constitutes “doing business in California,” suggesting reference to California’s Revenue & Tax Code.
Further feedback sought clearer reporting rules for corporate groups, especially regarding multinational corporations with complex structures. Suggestions included requiring parent companies to provide consolidated reporting that encompasses their subsidiaries.
Ceres advocates strongly for improved transparency in corporate climate risk disclosures, citing the feedback received from stakeholders as crucial for shaping regulatory approaches. The objective of the legislation is to establish standardized, high-quality disclosures detailing companies’ climate-related financial risks, thereby making it easier for investors and consumers to understand the implications of a company’s climate actions.
The regulations necessitate disclosure of Scope 1, 2, and 3 emissions data, with Scope 1 and 2 disclosures set to begin in 2026 and Scope 3 disclosures expected in 2027. CARB is required to finalize implementing regulations by July 1, 2025, which will clarify what qualifies as “doing business in California.” Companies failing to comply with the reporting requirements could face substantial penalties; noncompliance with SB 253 could lead to fines of up to $500,000 per reporting year, while SB 261 penalties could reach up to $50,000 annually.
California’s climate disclosure laws have, however, faced legal challenges from business groups claiming that the legislation violates the First Amendment and federal regulations. In contrast to the struggles facing the SEC’s own climate disclosure rules, California’s framework remains viable and is continuing its progress.
As implications of these new laws unfold, developments have been noted in other states that are considering following suit, including New York, Illinois, Colorado, and New Jersey. The response from over 100 experts involved in roundtable discussions indicates a general readiness among corporations to adapt to emerging climate disclosure requirements, highlighting an urgent need for clear and predictable regulations to facilitate compliance.
In summary, California’s proactive approach in establishing climate disclosure laws is garnering significant public support and setting a precedent that may influence other states and entities as they navigate the growing emphasis on corporate accountability in relation to climate change.
Deeper Dive: News & Info About This Topic
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- Google Search: California Climate Disclosure Laws
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- KPMG: Focus on 2026 Reporting
- Encyclopedia Britannica: California Climate Laws
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- Google News: California Emissions Laws
