California Delays Climate Reporting until July 2025
California is delaying implementation of the state’s climate reporting laws until July 1, 2025. On September 27, 2024, Governor Gavin Newsom signed into law SB 219, which implements the six-month delay for SB 253, known as the Climate Corporate Data Accountability Act. The bill also makes changes to laws created under SB 261, which requires certain companies to disclose publicly their climate-related financial risks. The governor originally proposed a two-year delay for the bills.
Key Changes
SB 219 delays until July 1, 2025 the requirement that the California Air Resources Board adopt regulations on emissions reporting. The law also makes three other key changes:
It requires that forthcoming CARB regulations will determine when Scope 3 reporting would begin, rather than no later than 180 days after its scope 1 emissions and scope 2 emissions are reported.
It allows a parent company to consolidate the reports rather each subsidiary. Lastly, the bill also removes the requirement that the annual fee be paid upon filing the disclosure.
It also authorizes, rather than requires, the state board to contract with an emissions reporting organization to develop a reporting program to receive and make certain required disclosures publicly available.
The reporting deadlines remain unchanged. Companies must still report Scope 1 and 2 emissions in 2026 and Scope 3 emissions in 2027.
Opposition to Delay
The laws were the first in the nation to require reporting on GHG emissions and climate risks. California lawmakers and climate advocates opposed Newsom’s delay proposal, first presented in a budget trailer bill in July.
Newsom previously supported delaying implementation of the law. In a signing statement for SB 261, Newsom stated that the “implementation deadlines in this bill are likely infeasible, and the reporting protocol specified could result in inconsistent reporting across businesses subject to the measure.”
Newsom expressed concern “about the overall financial impact of this bill on businesses” and asked CARB to “closely monitor the cost impacts as it implements this new bill and to make recommendations to streamline the program.”
Lawsuit
Implementation of the laws still faces legal challenges. Earlier in the year, a coalition of business groups filed a lawsuit challenging the two laws as violating the First Amendment by compelling speech on a “politically controversial” topic and that the Clean Air Act preempts California’s “de facto regulations of greenhouse-gas emissions nationwide.”