In October 2023, California Governor Gavin Newsom signed into law the Climate Corporate Accountability Act (SB 253) and the Climate‐Related Financial Risk Act (SB 261), jointly referred to as the Climate Accountability Package. As summarized in WilmerHale’s prior blog post, SB 253 requires reporting entities with total annual revenues exceeding $1 billion that do business in California to report their global greenhouse gas (GHG) emissions beginning in 2026. SB 261 requires large businesses with annual revenues of over $500 million operating in California to biannually disclose climate-related financial risks and their mitigation strategies.
At the close of California’s legislative session, on August 31, 2024, the state legislature passed Senate Bill 219, which proposes several amendments to the Climate Accountability Package, including extending the rulemaking deadline from January 1, 2025, to July 1, 2025. If these amendments are passed, details about disclosure obligations under SB 253 may not become available until July 1, 2025. SB 219 differs from Governor Newsom’s proposed amendments to the Climate Accountability Package, outlined in a budget trailer bill, which did not advance in the legislature. Governor Newsom’s trailer bill would have delayed SB 253’s emissions disclosure requirements by two years. Instead, SB 219 maintains that a reporting entity, starting in 2026, or another set date to be determined by the California Air Resources Board (CARB), as the first year for reporting entities to begin publicly disclosing their scope 1, 2 and 3 emissions.
In addition, SB 219 would require CARB to prepare a schedule for disclosure of scope 3 emissions, rather the current timeline requiring scope 3 emissions disclosure no later than 180 days after scope 1 and 2 emissions disclosure. Finally, SB 219 would expressly allow a covered entity to consolidate emissions disclosure reports at the parent company level, relieving the subsidiaries of any requirement to submit a separate report.
SB 219 would eliminate the filing fee requirements for corporations when filing their GHG emissions disclosure report for SB 253 and SB 261. Finally, SB 219 would authorize, rather than require, CARB to contract with a climate reporting organization to develop a program through which the required disclosures would be made public.
Governor Newsom has until September 30, 2024, to sign or veto SB 219. If signed, the bill will take effect on January 1, 2025.
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