Value chain emissions become more visible
Elba Pareja-Gallagher
Sustainability consultant & Keynote speaker & trainer | Gender equity & Allyship expert | ShowMe50% women leading 501 (c)(3) | UPS (Retired). I ??getting into good trouble!
While the U.S. SEC continues to evaluate its climate related financial disclosure reporting regulations that will apply only to public companies, the California Senate has passed an emissions reporting bill that the governor says he will sign. The bill will apply to public and private companies with more than $1B in revenue who are doing business in California. Companies that haven’t done so already, are wise to embark on their greehouse gas emissions inventory journey.
What are the basic requirements the Climate Corporate Data Accountability Act (SB-253) in current form?
By January 1, 2025: develop and adopt regulations requiring business entities with revenues in excess of $1B to report their audited scope 1 & 2 emissions starting in 2026 and then annually.
2027: start reporting scope 3 greenhouse gas emissions annually
By July 1, 2027: contract with the University of California, the California State University, a national laboratory, or another equivalent academic institution to prepare a report on the public disclosures made by reporting entities.
2033 and every 5 years: assess the global greenhouse gas accounting and reporting standards.
Bottom line
California is taking the lead on mandated reporting of greenhouse gas emissions across the value chains of companies with revenues over $1B doing business in California.
The value chain is made up of every activity that goes into creating the products and services a company sells… from design to delivery to the customer to disposal. The activities are classified into scopes 1, 2 & 3 by the Greenhouse Gas Protocol, the most widely accepted standard for GHG accounting. There are 7 GHGs, 3 scopes and 15 activities. The inventory will have to be audited.
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If you are a supplier to the entities being required to report, you are in their value chain and they may come knocking on your door to collect your data. Are you ready?
Sources & further reading
SB-253 Climate Corporate Data Accountability Act