Request for Comments. On December 16, 2024, the California Air Resources Board (“CARB”) issued a request for public feedback and information regarding certain implementing regulations for Senate Bill (“SB”) 253 (the Climate Corporate Data Accountability Act) and SB 261 (the Climate-Related Financial Risk Act). As a reminder, SB 253 requires U.S. companies doing business in California with annual revenues over $1 billion to begin reporting Scope 1 and 2 greenhouse gas (“GHG”) emissions in 2026 and Scope 3 GHG emissions in 2027. SB 261 requires U.S. companies doing business in California with annual revenues over $500 million to biennially report on climate-related risks and their steps to mitigate such risks, with the first report due on or before January 1, 2026. Both SB 253 and SB 261 make CARB responsible for the laws’ enforcement and for adopting certain implementing regulations.
ESG
Preparing for California’s Climate Reporting Legislation – Takeaways from Recent Amendments and Early AB 1305 Reporting Trends
Last year, California adopted a trio of laws requiring certain public and private companies to provide climate-related disclosures. As a quick refresher:
- Climate Corporate Data Accountability Act (Senate Bill 253). For U.S. companies doing business in California with annual revenues over $1 billion, Senate Bill (“SB”) 253 requires them to report their greenhouse gas (“GHG”) emissions annually beginning in 2026 (for Scope 1 and 2 GHG emissions) and 2027 (for Scope 3 emissions).
- Greenhouse Gases: Climate-related Financial Risk (Senate Bill 261). For U.S. companies doing business in California with annual revenues over $500 million, SB 261 effectively requires them to begin biennial reporting in 2025 regarding their “climate-related financial risks” and adopted measures to reduce or adapt to them.
- Voluntary Carbon Market Disclosures (Assembly Bill 1305). For companies that make certain environmental claims, adopt particular environmental goals, or purchase, use, market, or sell voluntary carbon offsets in California, Assembly Bill (“AB”) 1305 requires annual website disclosure providing support for those claims, goals, or offsets.
Updated Summary of Director Education Opportunities Now Available
Gibson Dunn’s summary of director education opportunities has been updated as of October 2024. A copy is available at this link. Boards of Directors of public and private companies find this a useful resource as they look for high quality education opportunities.
Preparing for CDP’s New Sustainability Reporting Platform
Earlier this month, CDP (formerly known as the Carbon Disclosure Project) announced the launch of a new environmental disclosure platform. CDP is a non-profit that scores and assesses participating companies and cities, states, and regions on climate, deforestation, and water security topics. According to CDP, over 23,000 companies (representing two-thirds of global market capitalization) disclosed through CDP in 2023.
Updated Summary of Director Education Opportunities Now Available
Gibson Dunn’s summary of director education opportunities has been updated as of June 2024. A copy is available at this link. Boards of Directors of public and private companies find this a useful resource as they look for high quality education opportunities.
Eighth Circuit Establishes Briefing Schedule for SEC Climate Disclosure Rules Litigation
On May 20, 2024, the U.S. Court of Appeals for the Eighth Circuit issued an order establishing the briefing schedule for the consolidated litigation challenging the Securities and Exchange Commission’s (“SEC") final climate disclosure rules.
Updated Summary of Director Education Opportunities Available
Gibson Dunn’s summary of director education opportunities has been updated as of April 2024. A copy is available at this link.
Boards of Directors of public and pre-IPO companies find this a useful resource as they look for high quality education opportunities.
Fifth Circuit Stay of the SEC’s Climate Disclosure Rule Dissolved
On March 21, 2024, the Judicial Panel on Multidistrict Litigation randomly selected the U.S. Court of Appeals for the Eighth Circuit to hear all cases challenging the Securities and Exchange Commission’s final climate disclosure rule. Within the first ten days after the rule’s issuance, nine petitions were filed, in six different circuits, challenging the rule.
Updated Summary of Director Education Opportunities Available
Gibson Dunn’s summary of director education opportunities has been updated as of October 2023. A copy is available at this link. Boards of Directors of public and private companies find this a useful resource as they look for high quality education opportunities.
UPDATE: California Governor Signs Climate Legislation Into Law, But Signals Changes To Come
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.