Dive Brief:
- Environmental nonprofit Ceres has asked the California regulator responsible for enforcing the state’s climate disclosure regulations to support the implementation of the rules contained in Senate Bills 253 and 261.
- Ceres said in a Monday comment letter to the California Air Resources Board, that once these corporate transparency laws are implemented, they will “help deliver standardized, high-quality disclosures of companies’ climate related financial risks to investors and consumers.” The letter reflected the views of more than 100 climate and financial reporting experts from over 70 companies, institutional investors and trade associations, according to Ceres.
- The letter also said complying with California’s climate disclosure rules would not be a strain on reporting entities, as 93% of companies that responded to a survey by Ceres last year said they felt “very prepared” or “somewhat prepared” to comply with SB 253 and SB 261. Seventy-one percent of survey respondents said they were already voluntarily reporting their climate and greenhouse gas emissions metrics.
Dive Insight:
Ceres’ comment letter summarizes the insights and perspectives of more than 100 experts that participated in a series of virtual roundtables the nonprofit hosted at the beginning of the year. Ceres said nearly all participants represented entities that would be subject to California’s disclosure laws and reflected a wide range of sectors and industries, including energy, utilities, technology, industrials, apparel, telecommunications, finance, retail, and food and beverage.
The nonprofit said the January roundtables were held under the Chatham House Rules and, hence, all the collected responses were anonymized and not attributed to specific individuals.
The letter said that businesses subject to SB 253 — the Climate Corporate Data Accountability Act, which applies to companies with over $1 billion in revenue — and SB 261 — the Climate-related Financial Risk Act, which applies to companies with over $500 million in revenue — “uniformly request regulatory certainty” as they work toward developing internal capacity, structures and procedures necessary to comply with the bills.
“Predictability is critical to these businesses’ ability to make informed decisions and allocate resources efficiently,” Ceres Managing Director Steven Rothstein and Climate Financial Regulation Director Jake Rascoff said in the March 17 letter. “The sooner CARB’s regulations are communicated to covered entities, the better positioned those entities will be to comply in 2026.”
Ceres also said “companies’ top focus is interoperability” and CARB should take steps to minimize duplication of efforts from companies that will be required to report under other jurisdictions’ climate reporting regulations.
Nearly every company Ceres said it heard from is already reporting voluntarily and planning to comply with the other jurisdictional climate-related financial risk and emissions reporting requirements. The nonprofit said that includes the European Union’s Corporate Sustainability Reporting Directive and/or other mandatory disclosure regulations elsewhere that adhere to standards outlined by the International Sustainability Standards Board. Ceres said both the CSRD and ISSB standards have a “high degree of alignment.”
“Companies do not want to submit a new, bespoke report to satisfy the California laws,” the letter said. “The proliferation of disparate reporting requirements makes the exercise of climate disclosure a compliance headache and a box-checking exercise; it detracts from the purpose of driving meaningful change at companies and supplying consumers of the information with decision-useful insights.”
The pair of climate-risk disclosure laws were approved by California Gov. Gavin Newsom in October 2023. Last year, the governor signed another law — Senate Bill 219 — that included a series of amendments to both bills, while still mandating more climate-related disclosures from large companies operating in the state.
SB 219 retained the original reporting deadlines laid out in the initial disclosure laws, with some businesses expected to report as early as 2026. However, it provided additional flexibility and time for the promulgation of regulations that are to be adopted by CARB.
