California Legislature Passes Landmark Climate Disclosure Laws

California’s state legislature has passed new laws – the Climate Corporate Data Accountability Act (“SB 253”) and Greenhouse Gases: Climate-Related Financial Risk (“SB 261”) – potentially shaping U.S. climate disclosure legislation before the U.S. Securities and Exchange Commission (the “SEC”) has finalized its climate disclosure rules. The California governor is expected to sign the laws shortly. 

The new legislation will require certain large public and private companies that conduct business in California to make public disclosures regarding their Scope 1, Scope 2 and Scope 3 greenhouse gas (“GHG”) emissions and their climate-related financial risks. 

For more information on the new Californian laws, see our client briefing.

The SEC’s proposal on climate disclosure rules has not yet been adopted, however, and the final version of its rules may differ significantly from the original proposal. The SEC’s most recent regulatory agenda indicates that the SEC may act on the climate disclosure rules in October 2023, but the agenda is not binding on the SEC, and notably, much of what is now scheduled for October 2023 was originally scheduled for October 2022. For further details regarding the SEC’s proposal, see our earlier client briefing.