Delayed rulemaking deadlines are expected for California’s climate disclosure bills, SB 253, the Climate Corporate Data Accountability Act (CCDAA), and SB 261, the Climate-Related Financial Risk Act (CRFRA). This update comes as no surprise – in Governor Gavin Newsom’s signing messages on both the CCDAA and the CRFRA, he expressed concern over the feasibility of the implementation and compliance timelines contained in the bills’ texts.
On August 31, 2024, the California legislature passed SB 219, which, if signed by the governor, would effectively delay the initial implementation of both laws by six months. Newsom now has until September 30 to sign or veto the bill. UPDATE: The governor signed SB 219 on September 27, 2024.
SB 219 modifies the original bill texts for both the CCDAA and CRFRA to extend the California Air Resources Board (CARB) rulemaking deadline by six months to July 1, 2025. Entities will still be required to make their first disclosure of Scopes 1 and 2 emissions sometime in 2026, and Scope 3 emissions disclosures sometime in 2027, pursuant to deadlines specified in the 2025 CARB rulemaking.
SB 219 also makes the following substantive revisions to the CCDAA and CRFRA that are relevant to companies with reporting responsibilities: (1) adding the option for reports by the parent company only, so that a qualifying subsidiary of a qualifying parent company does not need to submit a separate disclosure report; (2) modifying the Scope 3 emissions reporting timeline to use a scheduled approach that will be specified in the forthcoming CARB regulations; and (3) removing the requirement that an entity’s annual administration fee be paid to CARB upon disclosure. The scheduled approach is designed to replace the original 180-day disclosure timeline for Scope 3 emissions following disclosure of Scopes 1 and 2 emissions. The schedule is yet to come – it will be developed as part of CARB’s rulemaking under the CCDAA and CRFRA.
UPDATE: Deadlines for the third in the trio of new climate reporting laws, the Voluntary Carbon Market Disclosures Act (VCMDA), remain the same after a bill (AB 2331) that sought to extend the compliance deadline by six months failed timely passage through the legislature. Therefore, the January 1, 2025 deadlines in the VCMDA remain in place and carry monetary penalties for noncompliance.
More information about the CCDAA, CRFRA, and VCMDA can be found in our original advisory, “California’s Climate Disclosure Requirements and Their Far-Reaching Effects.”
On August 31, 2024, the California legislature passed SB 219, which, if signed by the governor, would effectively delay the initial implementation of both laws by six months. Newsom now has until September 30 to sign or veto the bill. UPDATE: The governor signed SB 219 on September 27, 2024.
SB 219 modifies the original bill texts for both the CCDAA and CRFRA to extend the California Air Resources Board (CARB) rulemaking deadline by six months to July 1, 2025. Entities will still be required to make their first disclosure of Scopes 1 and 2 emissions sometime in 2026, and Scope 3 emissions disclosures sometime in 2027, pursuant to deadlines specified in the 2025 CARB rulemaking.
SB 219 also makes the following substantive revisions to the CCDAA and CRFRA that are relevant to companies with reporting responsibilities: (1) adding the option for reports by the parent company only, so that a qualifying subsidiary of a qualifying parent company does not need to submit a separate disclosure report; (2) modifying the Scope 3 emissions reporting timeline to use a scheduled approach that will be specified in the forthcoming CARB regulations; and (3) removing the requirement that an entity’s annual administration fee be paid to CARB upon disclosure. The scheduled approach is designed to replace the original 180-day disclosure timeline for Scope 3 emissions following disclosure of Scopes 1 and 2 emissions. The schedule is yet to come – it will be developed as part of CARB’s rulemaking under the CCDAA and CRFRA.
UPDATE: Deadlines for the third in the trio of new climate reporting laws, the Voluntary Carbon Market Disclosures Act (VCMDA), remain the same after a bill (AB 2331) that sought to extend the compliance deadline by six months failed timely passage through the legislature. Therefore, the January 1, 2025 deadlines in the VCMDA remain in place and carry monetary penalties for noncompliance.
More information about the CCDAA, CRFRA, and VCMDA can be found in our original advisory, “California’s Climate Disclosure Requirements and Their Far-Reaching Effects.”
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If you have any questions, or would like additional information, please contact one of the attorneys on our Environment, Land Use & Natural Resources Team.