California Governor Extends Reporting Deadlines for SB 253 and SB 261 by Two Years

In a notable update concerning environmental regulatory compliance, Gavin Newsom’s Department of Finance issued a budget trailer bill proposing a two-year delay of the implementation of two signature California laws, Senate Bill 253 (SB 253) and Senate Bill 261 (SB 261), that require large businesses to disclose their climate impacts. The proposal, which includes other changes to the laws, is in the hands of the Legislature for approval and further changes to the language are expected. This proposal follows initial indications from Governor Newsom regarding potential delays due to budgetary and implementation challenges as well as substantial opposition from business.

According to the revised timeline, by January 1, 2027, the state board is tasked with developing and adopting regulations that will mandate reporting entities to annually disclose their scope 1, scope 2, and scope 3 emissions, alongside securing an assurance engagement conducted by an independent third-party assurance provider.

Key Updates Include:

• Two (2) year delay for compliance by reporting entities including extended grace period for Scope 3 emissions, allowing entities to report without facing penalties until 2032
• Clarification that reporting requirements are to be consolidated at the parent company level, simplifying the process
• The removal of the mandate for reporting entities to pay an annual fee to the state board upon submission of reports, easing financial burden

Senate Bill 253, also referred to as the Climate Corporate Data Accountability Act, requires entities to disclose their direct and indirect greenhouse gas emissions following the GHG Protocol framework. This legislation is designed to enhance corporate accountability for GHG emissions and encourage strategic alignment with the state’s climate objectives.

Senate Bill 261 mandates companies to disclose their climate-related financial risks in accordance with the TCFD (Taskforce for Climate related Financial Disclosures), acknowledging the growing impact of climate change. This legislation aims to bolster organizational preparedness and resilience against climate-induced events.

New Key Dates:

The extension provided by CARB affords organizations the necessary timeframe to refine their reporting processes and ensure the submission of accurate and comprehensive data. This development is anticipated to facilitate a more seamless transition for businesses endeavoring to comply with the SB 253 and SB 261. Businesses should prudently take the opportunity to prioritize mechanisms for emissions tracking and climate risk reporting.

This regulatory update is part of a broader trend of emerging climate-focused regulations, including the currently paused Securities and Exchange Commission's (SEC) disclosure requirements, New York's Local Law 97, and the European Union's Corporate Sustainability Reporting Directive (CSRD).

At Weaver, we understand the complexities and challenges that come with ensuring compliance with environmental regulations. Our team of ESG practitioners is well versed in TCFD-aligned reporting, and our engineers possess the technical expertise and experience necessary for reporting under the GHG protocol. Having been at the forefront of emissions reporting since the inception of the Clean Air Act, Weaver is uniquely positioned to assist your organization in navigating these requirements effectively. Reach out to discover how we can prepare your organization to report on sustainability matters with confidence, satisfying both regulatory requirements and other critical demand drivers in your value chain.

For more information, contact us today. We’re here to help.

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