California Affirms GHG Emissions & Climate Risk Reporting Deadlines
On September 27, 2024, California Gov. Gavin Newsom signed into law Senate Bill (SB) 219, Greenhouse gases: climate corporate accountability: climate-related financial risk. SB 219 amends existing law from SB 253 and SB 261 to provide additional time for developing related regulations while maintaining the existing company reporting deadlines. The amendments also provide additional flexibility for reporting companies.
The amendments do not change the timeline for affected companies to report under the following requirements and deadlines. The revenue thresholds are based on total revenues and are not limited to revenues earned in California.
- Annual GHG Emissions Reports – U.S. companies with revenues greater than $1 billion doing business in California
- Scope 1 and 2 emissions reporting will start with fiscal year (FY) 2025 emissions to be reported in 2026
- Limited assurance on FY 2025 to 2028 emissions
- Reasonable assurance beginning with FY 2029 emissions
- Scope 3 emissions will start with FY 2026 emissions to be reported in 2027
- Limited assurance starting with FY 2029 emissions
- Scope 1 and 2 emissions reporting will start with fiscal year (FY) 2025 emissions to be reported in 2026
- Biennial Climate-Related Financial Risk Reports – U.S. companies with revenues greater than $500 million doing business in California
- By January 1, 2026, companies must begin to disclose climate-related financial risk reports that meet either of the following standards:
- The Final Report of Recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), plus measures adopted to reduce and adapt to climate-related financial risk, or
- International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards (SDS), as issued by the International Sustainability Standards Board (ISSB)
- By January 1, 2026, companies must begin to disclose climate-related financial risk reports that meet either of the following standards:
Immediate Takeaways
- The deadline for the California Air Resources Board (CARB) to adopt implementing regulations for greenhouse gas (GHG) emissions reporting has been extended by six months to July 1, 2025.
- Annual GHG emissions reports can be consolidated at the parent company level. If a company subsidiary is required to report, the subsidiary is not required to prepare a separate report. The law already allows biennial climate-related financial risk reports to be consolidated at the parent company level.
- A reporting entity can make the annual GHG emissions disclosure either directly to CARB or, if CARB chooses to contract with an emissions reporting organization, to that emissions reporting organization. CARB is now authorized, rather than required, to contract with an emissions reporting organization to develop a reporting program to receive and make certain required disclosures publicly available.
- The Scope 3 emissions reporting deadline could be slightly extended as CARB will establish the deadline, but the first disclosure would still be due in 2027. The Scope 3 emissions reporting deadline is no longer prescribed within 180 days of the Scope 1 and 2 emissions report.
- There will still be annual fees for companies required to report under the law, but the law no longer requires the GHG emissions report fee to be paid at the time of filing. Instead, CARB will determine when the payment will be due.
U.S. organizations that do business in California and meet the revenue thresholds should plan accordingly to help ensure full compliance with the requirements.
If you have any questions or need assistance, please reach out to a professional at Forvis Mazars.
For more information on the topics of GHG emissions reporting, assurance of GHG emissions, and climate-related risk and opportunity disclosures, see our other related FORsights™:
link