California recently issued an Enforcement Notice about the Climate Corporate Data Accountability Act (SB 253), which requires reporting in 2026 on data from 2025. Ropes & Gray’s Michael Littenberg, Marc Rotter and Peter Witschi published a short memo on the Notice:
“… CARB indicates that it recognizes that companies may need some lead time to implement new data collection processes to allow for fully complete scope 1 and 2 emissions reporting, to the extent they do not currently possess or collect the relevant information. Accordingly, CARB will exercise its enforcement discretion such that, for the first report due in 2026, reporting entities may submit scope 1 and 2 emissions ‘from the reporting entity’s prior fiscal year’ (quotes in the original) that can be determined from information the reporting entity already possesses or is collecting at the time the Notice was issued (December 5, 2024).
The Enforcement Notice goes on to indicate that CARB will exercise enforcement discretion for the first reporting cycle on the condition that entities demonstrate good faith efforts to comply with the requirements of the law. This enforcement discretion is aimed at supporting entities actively working toward full compliance. Therefore, for the first reporting cycle, CARB will not take enforcement action for incomplete reporting against entities, as long as they make a good faith effort to retain all data relevant to GHG emissions reporting for the entity’s prior fiscal year.”
This is good news – even though the original compliance deadline remains intact, CARB won’t go after companies who report using incomplete data, as long as it is evident the company made good faith efforts.
But wait – there’s more…
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