On September 27, 2024, California Governor Gavin Newsom signed Senate Bill (SB) 219 into law, marking amendments to California’s Climate Corporate Data Accountability Act (SB 253) and Climate-Related Financial Risk Reporting (SB 261). The bill introduces administrative amendments to existing climate disclosure laws and extends the deadline for the California Air Resources Board (CARB) to develop and adopt implementing regulations from January 1, 2025 to July 1, 2025. Notably, there is no extension of the original reporting deadlines for in-scope entities, meaning companies must adhere to the established reporting timelines.
What are the key reporting requirements?
1. Greenhouse Gas Disclosures (SB 253, “Climate Corporate Data Accountability Act”)
- Scope: Requires U.S. entities with over $1 billion in annual revenue that do business in California to file annual reports disclosing Scope 1, 2, and 3 GHG emissions
- Framework: Disclosures must follow the Greenhouse Gas Protocol
- Initial Reporting Deadlines:
- Scope 1 and Scope 2 Emissions: Reporting begins in 2026
- Scope 3 Emissions: Reporting begins in 2027*
- Assurance Requirements:
- Limited assurance for Scope 1 and Scope 2 emissions beginning in 2026
- Reasonable assurance for Scope 1 and Scope 2 emissions beginning in 2030
- Limited assurance for Scope 3 emissions beginning in 2030
- Key Amendments: Subsidiaries are not required to file separate reports if their parent company files a consolidated report at the parent company level covering all emissions
*The due date for scope 3 emissions reporting is to be determined by CARB, rather than 180 after the due date for scope 1 and 2 emissions reporting, as stated in original bill.
2. Climate-Related Financial Risk Disclosures (SB 261, “Greenhouse Gases: Climate-Related Financial Risk”): •
- Scope: Requires U.S. entities with over $500 million in annual revenue that do business in California to file biennial reports disclosing climate-related financial risks and the measures taken to address those risks
- Framework: Disclosures must follow the Task Force on Climate-related Financial Disclosures (TCFD) or equivalent standards
- Initial Reporting Deadline: Initial reports are due by January 1, 2026
- Key Amendments: Certain climate reporting activities, such as the use of third-party climate reporting organizations, are now discretionary for CARB. The amendments are administrative in nature, with little impact to the compliance requirements for in-scope entities.
Timeline for Compliance:
The reporting requirements come with staggered deadlines. Below is a summary of the timeline for GHG and climate-related financial disclosures:
| Reporting Requirement | Deadline |
| Scope 1 & Scope 2 Emissions (SB 253) | 2026 |
| Scope 3 Emissions (SB 253) | 2027 |
| Climate-Related Financial Risk (SB 261) | January 1, 2026 |
What steps should companies take right now?
- Evaluate Parent-Subsidiary Relationships: Assess whether parent companies’ consolidated reports cover subsidiary obligations under SB 253.
- Prepare to Report on GHG Emissions Data: Begin collecting and managing GHG emissions data (Scope 1, 2, and 3), establish data governance systems, and prepare for third-party assurance.
- Prepare for Climate-Risk Reporting: Review existing climate-related risk processes to ensure alignment with TCFD standards.
- Monitor Regulation Development: Stay updated on CARB’s implementation of regulations, particularly regarding Scope 3 emissions reporting timelines.
Please contact ICR’s Strategic ESG Advisory Team at ESG@icrinc.com to help your organization assess the next steps to comply with California’s climate disclosure regulations.
