On October 7, 2023, California Governor Gavin Newsom signed into law Senate Bill 253, the Climate Corporate Data Accountability Act (“SB 253") and Senate Bill 261, Greenhouse Gases: Climate-Related Financial Risk (“SB 261"). The legislation imposes extensive new climate-related reporting requirements on any public or private U.S. business entity with annual revenues over $1 billion and $500 million (for SB 253 and SB 261, respectively) doing business in the state. A detailed discussion of each bill is available in our recent client alert.
With his signatures, the Governor issued brief statements on SB 253 and SB 261 expressing his concern about the bills' “overall financial impact" on businesses and his view that the implementation deadlines are not feasible. He also noted that The Greenhouse Gas Protocol—the reporting standard for greenhouse gas emissions under SB 253—“could result in inconsistent reporting across businesses." The Governor indicated he would direct his “Administration to work with the bill's author and the Legislature next year [(i.e., 2024)] to address" these matters, but did not provide details as to how long the reporting requirements, which begin as early as 2025 for climate-related risks reports under SB 261, could be delayed. We will monitor for further updates as they as arise.
We would like to thank Lauren Assaf-Holmes in our Orange County office for her work on this post.