ESG Climate Disclosures: Will States Be The First To Act?

As discussed in a previous blog post, 2022 will be an important year for ESG regulatory activity.

While the SEC works to develop a legally-defensible proposal on disclosures of climate-related risks, California, usually the tip-of-the-spear on climate policy, is advancing ESG legislation. Recently, the California Senate passed the Climate Corporate Accountability Act (SB-260), a bill that requires public and private US-based companies that do business in California with annual revenues over $1 billion to report their Scope 1, 2 and 3 greenhouse gas (GHG) emissions to the California Secretary of State. The GHG disclosure requirements would take effect in 2025. Companies would need to follow the Greenhouse Gas Protocol Standards and guidance developed by the World Resources Institute and the World Business Council for Sustainable Development when making these GHG disclosures. The disclosures will also require independent verification by a third-party auditor,