Governor Proposes Delay to Climate Reporting

California Governor Gavin Newsom proposed budget legislation that would delay the implementation of the state’s climate reporting laws by two years, until 2028. The budget trailer bill gives the California Air Resources Board (CARB) until 2027 to adopt regulations for the bill and would give companies until 2028 to report on scopes 1 and 2 emissions and until 2029 to report on Scope 3 emissions.

SB 253, known as the Climate Corporate Data Accountability Act, requires companies with revenues of more than $1 billion to report their greenhouse gas (GHG) emissions related to both operations and their supply chain. SB 261 requires companies with annual revenue of more than $500 million and that do business in California to disclose publicly their climate-related financial risks and how they will address them.

The laws were the first in the nation to require reporting on GHG emissions and climate risks. A coalition of business groups filed a lawsuit challenging the laws.(see Business Groups Challenge California Climate Reporting Law on Constitutional Grounds.)

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.”