California to extend climate bill implementation deadline – but not for companies

The California Senate has approved a bill offering a six-month extension to the state’s Air Resources Board to develop and adopt the specific regulations under which companies will have to disclose their greenhouse gas emissions – but the delay doesn’t apply to the disclosures themselves.

On Saturday, August 31, California Senators approved bill SB 219, correcting some of the issues that raised criticism about the state’s upcoming climate disclosure laws. 

The new bill gives the California Air Resources Board (CARB) until July 1, 2025 to develop and adopt regulations requiring companies to disclose their GHG emissions across Scopes 1, 2 and 3 – and effectively enact California bill SB 253, known as the Climate Corporate Data Accountability Act.

The initial bill gave CARB until January 1, 2025 to create the legal framework for implementation, but even as he signed the climate accountability package last October, Governor Gavin Newsom had warned that implementation deadlines were “likely infeasible”.

Senators reject proposed two-year delay

In July this year, Governor Newsom proposed a two-year delay, which would have given CARB until 2027 to set up the regulations, with the first corporate disclosures due only in 2028. 

But the legislators’ response to the proposed amendment was to adopt a different amending bill, extending CARB’s deadline by just six months and maintaining 2026 as the first reporting year for the 10,000 public and private companies that fall under the scope of the climate accountability package.

The newly-approved bill also allows companies to consolidate GHG emissions disclosures and climate risk reports at parent company level (as a reminder, SB 261 requires entities with total annual revenues in excess of US$500 million to disclose their climate-related financial risks and measures taken to reduce and adapt to these every two years).

Finally, it removes the requirement to publicly disclose Scope 3 emissions no later than 180 days after Scope 1 and 2 emissions are disclosed – instead letting CARB specify the schedule for Scope 3 emissions.

Companies already preparing for California climate laws

A recent survey found that a wide majority of large US companies were taking active steps to prepare for California climate regulations – even as the implementation date still hung in the balance.

Among the actions taken to prepare, firms said they have assigned dedicated teams or individual employees to investigate relevant laws and build internal competencies.

Many are also collecting data and building processes using existing tools or by deploying new software solutions, while 39% are conducting a readiness assessment.