Looks like we are going to end the year on a decidedly California note… A few days after state lawmakers pressed California Air Resources Board (CARB) about delays in implementing SB 253 (the Climate Corporate Data Accountability Act) and SB 261 (the Climate Related Financial Risk Act), CARB issued an “Information Solicitation to Inform Implementation of California Climate-Disclosure Legislation”.
Specific points on which CARB seeks input for SB 253:
- How to define/interpret “doing business in California” since that term is not explicitly defined in either law.
- How companies should identify “all businesses covered by the laws (i.e., that exceed the annual revenue thresholds in the statutes and do business in California)?”
- How to balance legal mandates with reliance on “protocols or standards published by external and potentially non-governmental entities”.
- Identifying “costs for voluntary reporting already being submitted by companies”.
- Whether the state should require reporting directly to CARB or contract those responsibilities to a reporting organization.
- Whether “there are specific aspects of scopes 1, 2, or 3 reporting that CARB should consider standardizing.”
- “What options exist for third-party verification or assurance for scope 3 emissions?” and what standards should be used to define limited assurance and reasonable assurance.
- “How should voluntary emissions reporting inform CARB’s approach to implementing SB 253 requirements?”
Specific points on which CARB seeks input for SB 261:
- “What is the appropriate timeframe within a reporting year to ensure data are available, reporting is complete, and the necessary assurance review is completed?”
- “Should CARB require a standardized reporting year (i.e., 2027, 2029, 2031, etc.), or allow for reporting any time in a two-year period (2026-2027, 2028-2029, etc.)?”
- “What, if any, disclosures should be required by an entity that qualifies as a reporting entity (because it exceeds the revenue threshold) for the first time during the two years before a reporting year?”
- Whether there are opportunities to use or learn from other types of climate financial risk disclosures.
CARB also noted they are “already in the process of hiring staff” – an apparent response to one criticism in the legislators’ letter.
The deadline for submitting comments is February 14, 2025.
Members can learn more about climate disclosures here.
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