After not accepting California Governor Newsom's proposal to delay implementing California's Climate Accountability laws by two years, the California legislature passed amendments on August 31, 2024, to California's 2023 Climate Accountability laws via Senate Bill 219 ("SB 219"), which further support the implementation of reporting greenhouse gas disclosures and climate-related risk financial reporting.
As discussed in our previous article, California's Climate Accountability laws included three bills: Senate Bill 253, the "Climate Corporate Data Accountability Act;" Senate Bill 261, "Climate‐Related Financial Risk;" and Assembly Bill 1305, the "Voluntary Carbon Market Disclosures Act." SB 219 only amends Senate bills 253 and 261, by providing additional time for the promulgation of related regulations while maintaining the same reporting deadlines. In theory, this will reduce the amount of time subject companies will have to prepare these disclosures with the benefit of interpretative regulations. Governor Newsom has until September 30, 2024, to sign, veto, or allow SB 219 to become law by taking no action.
If SB 219 becomes law, it would provide the following changes:
- The California Air Resources Board (CARB) would have an additional six months to promulgate regulations for the Climate Corporate Data Accountability Act, moving the rulemaking deadline from January 1, 2025, to July 1, 2025.
- Scope 3 emissions would still have to be disclosed annually, starting in 2027; however, CARB would be required to provide reporting entities with a schedule for the Scope 3 emissions reporting, rather than requiring reporting entities to disclose Scope 3 emissions within 180 days of Scope 1 and 2 emissions reporting.
- Reporting entities would be permitted to consolidate reporting at the parent company level, and if a subsidiary of such parent company qualifies as a reporting entity under the Climate Corporate Data Accountability Act, it would not be required to prepare a separate report.
- SB 219 would eliminate the filing fee requirements for reporting/covered entities when filing their emissions disclosure reports.
- CARB would be permitted, rather than required, to contract with a climate-reporting organization to prepare a public report that consolidates reported climate-related financial risk data.
SB 219 does not adjust the original 2026 and 2027 reporting deadlines, and reporting entities will begin publicly reporting their Scope 1 and Scope 2 emissions and climate-related financial risk reports starting in 2026 (for the prior fiscal year), on or by a date determined by CARB.
Amendments to Assembly Bill 1305 were separately proposed that would have changed Assembly Bill 1305's effective date from January 1, 2024, to July 1, 2025. The Legislature was unable to pass this amendment in its now concluded session so the effective date of Assembly Bill 1305 remains January 1, 2024.
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