Between recent rulemaking at the SEC and California’s GHG disclosure bills, many have been asking: when will mandatory GHG disclosures come to the US? While the SEC faces an uphill legal battle to implement its Climate-related Disclosures Rule, California has taken a proactive stance passing its own state-level disclosure laws that require businesses in California making at least $1 billion to disclose their GHG emissions and requiring certain climate-related risk disclosures. A recent survey of 95 C-suit executives of US-based companies from EcoOnline indicates that companies are taking the new laws seriously and are working towards compliance. The survey states:
“Virtually all respondents were aware of the new laws, and 85% were taking a proactive stance in understanding the new regulations. Furthermore, despite the recency of the California legislation, 83% of survey respondents were already on a path involving technology, data collection, report generation, and tracking against goals. A majority of companies taking a proactive approach are aware of Scope 3 emissions.”
Company action is different on a case-by-case basis but the survey identifies that:
- 77% of companies are collecting data and building compliance processes using existing tools
- 66% are deploying or searching for a software solution to streamline data collection & reporting
- 39% are conducting a readiness assessment.
California’s GHG disclosure laws are by no means a “done deal” with political and legal uncertainty as the laws face potential amendments and lawsuits. It’s encouraging to see fewer companies taking a “wait and see” approach as many are with the SEC’s Climate-related Disclosures Rule. Provided California’s laws can survive the legal challenge, it’s a question of when they will be implemented, not if they will be implemented. Companies appear to recognize that getting ahead of compliance is better than playing catch-up.
Our members can read more about California’s GHG disclosure laws here.
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