May 16, 2025

California’s Climate Disclosure Laws Gain Public Support

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.

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Author: STAFF HERE SAN DIEGO WRITER

SAN DIEGO STAFF WRITER The SAN DIEGO STAFF WRITER represents the experienced team at HERESanDiego.com, your go-to source for actionable local news and information in San Diego, San Diego County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Comic-Con International, San Diego County Fair, and San Diego Pride Festival. Our coverage extends to key organizations like the San Diego Regional Chamber of Commerce and United Way of San Diego County, plus leading businesses in biotechnology, healthcare, and technology that power the local economy such as Qualcomm, Illumina, and Scripps Health. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.

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