Last week, the California legislature passed two climate disclosure bills and sent them to the desk of Governor Gavin Newsom. You can read my summaries of SB258 (the Climate Corporate Data Accountability Act) and SB261 (Greenhouse gases: climate-related financial risk). Some observers questioned whether Newsom would sign these bills because he had apparently been silent about his thoughts on them. Yesterday, while attending a Climate Week event in New York City, he broke his silence. From Politico:
“California Gov. Gavin Newsom said Sunday he plans to sign a major bill that would change the way American companies report their climate risk. Speaking at a climate panel in New York City, the governor said ‘of course’ he would sign CA SB253 which would require companies earning at least $1 billion per year and doing business in the state to disclose their scopes 1, 2 and 3 emissions…
Newsom also said he would sign a related bill, CA SB261 by Sen. Henry Stern (D-Sherman Oaks), that would force large corporations to disclose their climate-related financial risks.”
So there it is. In a LinkedIn post yesterday about this news, PracticalESG.com Advisory Board member Michael Littenberg commented:
“What will the SEC do? That may now largely be irrelevant with so many companies subject to CA, CSRD and UK climate disclosure requirements and with ISSB S2 likely to become mandatory in some countries.”
Yet just as litigation is expected against the SEC’s final release on climate disclosure once that is issued, it seems highly likely we will see lawsuits in California once those laws are signed. Even so – as Michael points out – that isn’t really a reason for companies to push “pause” on climate data assessment and disclosure efforts. If you haven’t already started serious evaluations about where your company stands in terms of climate disclosure readiness, you may already be behind. Detailed guidance and annotations in our Guidebook Sample Disclosure for SEC Climate Disclosure Proposal are very helpful. Even though the Guidebook follows the SEC’s proposal, it offers unique, simple and practical technical, business and data quality guidance that apply to SB258 and SB261.
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