The Nickel Report

In recent months, some companies have begun reconsidering their sustainability targets. This trend is influenced by a range of factors, including economic pressures and scrutiny of climate action by the current federal administration and state attorneys general. In addition, many companies with interim decarbonization goals (e.g., companies with “net zero by 2050 goals” that also set 2030 targets) are finding they are not on track to meet them. When considering revising or abandoning existing goals, it is important to consider emerging risks under the current legal landscape, and to develop and follow a deliberate strategy to mitigate those risks.

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.

On Friday, August 31, 2024, both houses of the California legislature approved a bill (SB 219) making targeted changes to the SB 253 and 261 climate disclosure obligations, which are discussed at length in our previous post.

Recent developments could impact implementation timing and compliance obligations under California’s landmark climate emissions disclosure and financial risk reporting laws that were enacted last year.

On October 7, 2023 California Governor Gavin Newsom signed two landmark climate disclosure laws aimed at making major companies publicly disclose their greenhouse gas emissions and report on their climate-related financial risks. The first, the Climate Corporate Data Accountability Act (SB 253), will require all business entities with an annual revenue exceeding $1 billion to disclose their greenhouse gas emissions in a format accessible to the public. The second, SB 261, will require all business entities with annual revenue exceeding $500 million to publish a report on their “climate-related financial risks” on their websites. These first-in-the-nation laws are broader than the proposed SEC climate disclosure rule and reach more than just California-based entities.