The Nickel Report

On September 24, the California Air Resources Board (CARB) published a preliminary list of entities that CARB believes may be subject to climate reporting under SB 253 and SB 219 (requiring corporate greenhouse gas reporting) and SB 261 (requiring climate-related financial risk disclosure). CARB had previously announced its intention to release this list in its August workshop on regulation development and additional guidance regarding SB 253/261/219 implementation, of which a recorded video is available here.

As of early 2025, the landscape of climate disclosure requirements in the United States is shifting. Unsurprisingly, the Trump Administration has signaled its intent to roll back the controversial federal climate disclosure rule promulgated by the Securities and Exchange Commission (“SEC” or “Commission”) last year. Meanwhile, implementation of California’s suite of climate disclosure laws is moving forward, and at least two other states are considering copy-cat legislation. As companies operating in the United States continue to prepare for compliance at the state level, they should consider these developments alongside potential changes to international and voluntary reporting standards and should work to implement corporate processes that ensure consistency and accuracy in reporting across all relevant frameworks.

On March 6, 2024, by a party-line vote of 3-2, the US Securities and Exchange Commission (SEC) adopted final rules (entitled “The Enhancement and Standardization of Climate-Related Disclosures for Investors”) requiring most public companies to disclose climate-related information in registration statements and annual reports filed with the SEC. The SEC first proposed climate disclosure rules in March 2022, and the proposal has been a source of much debate and controversy, generating over 24,000 comment letters, more than any regulation in the history of the SEC.

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In a recent post, we discussed the various risks, trending issues, and emerging concerns arising from environmental, social, and corporate governance factors (“ESG”). As noted previously, neglecting ESG considerations can result in a number of risks to a company, including risks associated with the reputational, financial, and legal impacts of handling ESG issues poorly. We also observed how managing ESG issues well can enhance corporate value and performance, and create competitive advantages for companies. Given these emerging risks and opportunities, it is perhaps unsurprising that ESG has begun to play a larger role in the M&A context in recent years.