California Passes Greenhouse Gas Emissions Bill, Rejects Delay Request

On August 31, 2024, the California legislature passed Senate Bill 219, which supports the implementation of greenhouse gas emissions disclosures and climate-related risk financial reporting. As Michael B. Kirwan and Natasha Dempsey of Foley & Lardner explain, the bill rejects Governor Gavin Newsom’s request to delay implementing California’s Climate Accountability laws by two years.

Newsom has until September 30, 2024, to sign, veto, or allow Senate Bill 219 to become law by taking no action.

The entire climate accountability package consists of three bills: Senate Bill 253, the Climate Corporate Data Accountability Act; Senate Bill 261, Climate-Related Financial Risk; and Assembly Bill 1305, the Voluntary Carbon Market Disclosures Act.

SB 219 amends the Senate Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Bill. It keeps the same reporting deadlines but provides more time for publishing-related regulations. This will likely reduce the time companies have to prepare greenhouse gas emissions disclosures, with the benefit of interpretative regulations.

Reporting is consolidated at the parent company level. If a subsidiary qualifies as a reporting entity under the Climate Corporate Data Accountability Act, it would not be required to prepare a separate report.

Scope 3 emissions would still have to be disclosed annually, starting in 2027. CARB would be required to provide reporting entities with a schedule rather than requiring reporting entities to disclose Scope 3 emissions within 180 days of Scope 1 and 2 emissions reporting.

CARB would be permitted, rather than required, to contract with a climate-reporting organization to publish a report that consolidates reported climate-related financial risk data.