California’s Landmark Climate Disclosure Laws: State Affirms Disclosure Deadlines

On Sept. 27, California Governor Gavin Newsom signed into law Senate Bill (SB) 219, a bill that, among other things, affirms the mandatory disclosure deadlines for California’s landmark carbon accounting laws. In addition to affirming deadlines, SB219 makes targeted changes to SB253, the landmark California law that requires affected companies to report Scope 1 and Scope 2 emissions beginning in 2026 and Scope 3 emissions beginning in 2027. The signing of SB219 marks the defeat of efforts to delay the laws’ reporting requirements by two years.

SB219 does not meaningfully change SB261, the law requiring disclosure of climate-related financial risk information beginning in 2026. The bill, however, makes three targeted yet significant changes to SB253 despite retaining its core reporting deadlines.

First, SB219 extends the deadline by six months, from Jan. 1, 2025, to July 1, 2025, for the California Air Resources Board (CARB) to develop and adopt regulations to require annual disclosure of Scope 1, Scope 2, and Scope 3 emissions. With the 2026 reporting deadline for Scope 1 and Scope 2 emissions for the prior fiscal year remaining unchanged, however, companies will be forced to begin tracking emissions beginning in 2025, while the pertinent regulations would not be adopted until many months later. This discrepancy may pose a challenge, particularly for those out-of-state companies awaiting guidance on whether their minimal activity in California could subject them to reporting mandates.

Second, SB219 allows for reports to be consolidated at the parent company level. If a subsidiary of a parent company qualifies as a reporting entity, the subsidiary would not be required to prepare a separate report. This change appears to be intended to streamline reporting obligations.

Third, SB219 gives CARB the authority to develop a schedule for reporting Scope 3 emissions, rather than the hard deadline of 180 days after the disclosure of Scope 1 emissions and Scope 2 emissions. This change could give CARB some flexibility as part of the rulemaking process for setting deadlines for Scope 3 emissions. However, Scope 3 emissions still must be disclosed in 2027, remaining a challenging deadline for affected companies.

With the reporting deadlines of SB253 and SB261 now final, focus turns to the federal lawsuit challenging the constitutionality of both SB253 and SB261, Chamber of Commerce of the United States of America, et al. v. California Air Resources Board, et al., in the U.S. District Court for the Central District of California, case No. 2:24-cv-00801. The lawsuit argues the two laws unconstitutionally compel speech in violation of the First Amendment and conflict with existing federal law and the Constitution’s delegation to Congress of the power to regulate interstate commerce. A hearing on the parties’ dispositive motions has been pushed to Oct. 15. It seems that even in a best-case scenario, a final judgment in this action may be pushing up against companies’ SB253 obligations to measure GHGs, reaffirming that preparation and awareness are key for affected companies. As the 2025 compliance period approaches, affected companies should ensure they have the necessary programs, including legal and technical, in place to gather, analyze, and disclose the required information.

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