Breaking News: California Legislature Rejects Delay, Affirms Climate Disclosure Deadlines

Welcome to this special edition of "FWD Focus," Planet FWD's newsletter dedicated to keeping consumer brands informed about crucial sustainability developments and regulatory changes.

California Climate Bills: A Quick Refresher

Before we dive into the latest updates, let's recap what these bills are about:

• SB 253 (Climate Corporate Data Accountability Act): Requires large companies (>$1B revenue) doing business in California to disclose their greenhouse gas emissions (Scope 1, 2, and 3) annually, starting in 2026.
• SB 261 (Climate-Related Financial Risk Act): Mandates companies with >$500M revenue operating in California to disclose climate-related financial risks and mitigation strategies every two years, beginning January 1, 2026.

Critical Update: California Upholds Climate Disclosure Timelines

On August 31, 2024, the California Legislature passed SB 219, introducing key amendments to SB 253 and SB 261 while crucially maintaining the original 2026 reporting deadlines. This decision comes despite earlier proposals to delay implementation, underscoring California's unwavering commitment to timely corporate climate action. SB 219 still awaits Governor Newsom's signature, with a deadline of September 30, 2024

Key Amendments Introduced by SB 219

If signed by Governor Newsom, SB 219 would make several key amendments to SB 253 and SB 261, including:?

1. Modest Delay in Issuing Regulations: SB 253 requires the California Air Resources Board (CARB) to issue regulations establishing GHG emissions reporting requirements on or before January 1, 2025.? SB 219 would delay that deadline to July 1, 2025.
2. Consolidated Reporting Option: Parent companies can now file consolidated reports for their subsidiaries under SB 253, potentially streamlining the reporting process for large corporations.
3. No climate reporting organization: SB 219 removes the requirement for CARB to contract with a climate reporting organization to prepare reports on climate-related financial risk disclosures.?
4. Exemption for subsidiaries: SB 219 exempts subsidiaries from preparing separate reports if their parent company qualifies as a reporting entity.?
5. Flexibility on Scope 3 Deadline: CARB has been granted discretion to adjust the 2027 deadline for Scope 3 emissions disclosure under SB 253, potentially allowing for a more phased approach.

Key Insights: What This Means for Your Business

1. Deadlines Stand Firm: The 2026 reporting deadlines remain unchanged, emphasizing the urgent need for businesses to accelerate their preparation efforts.
2. Wide-Reaching Impact: Companies with over $500M in revenue doing business in California must prepare for comprehensive GHG emissions and climate-related financial risk disclosures.
3. Scope 3 Emissions in Focus: Preparation for Scope 3 emissions reporting is critical, as it covers the entire value chain and often represents the largest portion of a company's carbon footprint.
4. High Stakes for Non-Compliance: With potential fines up to $500,000, the financial risks of non-compliance are significant.

How Planet FWD Can Help

As you navigate these complex new requirements, Planet FWD is here to support you with:

• Comprehensive emissions tracking across your entire value chain
• Climate risk assessment aligned with SB 261 requirements
• Supplier engagement features for efficient Scope 3 data collection
• Customizable reporting templates for regulatory compliance
• Ongoing regulatory updates and compliance support

Don't let these evolving regulations catch you off guard. Schedule a free regulatory preparedness consultation to ensure your business is ready for 2026 and beyond.

Schedule Free Consultation

Stay tuned for our next edition of "FWD Focus," where we'll continue to decode carbon compliance for consumer companies and keep you informed about critical regulatory developments.