Tag: California climate disclosure laws

Corporate GovernanceESGLitigation

California Governor signs legislation tweaking requirements of climate disclosure laws

California Governor Gavin Newsom has signed into law Senate Bill 219, a bill that tweaks some of the requirements of California’s climate disclosure bills, SB 253, the Climate Corporate Data Accountability Act, and SB 261, Greenhouse gases: climate-related financial risk.  You may recall that, when Newsom signed those two bills into law in 2023, he questioned whether the implementation deadlines in the bills were actually feasible. (See this PubCo post.) So even as the bills were being signed, it looked like they might need a revamp in the near future.   In July this year, Newsom proposed, along with several other changes, a delay in the compliance dates for each bill until 2028. (See this PubCo post.) However, one of the bills’ key sponsors opposed the administration’s proposal, telling Politico that the proposal didn’t reflect an agreement with lawmakers: the ”administration really wants additional delays for the disclosures. And we don’t agree on that.” Apparently, Newsom’s proposal did not go anywhere. Then, at the end of August, the California Legislature passed SB 219, introduced by two sponsors of SB 253 and SB 261, which sought to meet the Governor part way. Compared to the changes that the Governor had proposed, the bill may strike some as fairly anemic: while the bill gives the California Air Resources Board, which was charged with writing new implementing regulations, a six-month reprieve in the due date, for reporting entities, there is no compliance delay in commencement of reporting—it’s a big goose egg. Nevertheless, on September 27, the Governor signed the bill. With the SEC’s climate disclosure rules on hold while challenges to those rules are litigated, as this article in the WSJ suggests, these California climate disclosure laws may well be the first—and perhaps the only—game in town, making California a “de facto national climate accounting regulator.” Unless, of course, legal challenges interfere with the application of these California laws also (see below)….

/ October 3, 2024
Corporate GovernanceESGSecurities

New Cooley Alert: “Comparing the SEC Climate Rules to California, EU and ISSB Disclosure Frameworks”

If you’ve been following the developments in climate disclosure regulation, you know that many U.S. companies may well be subject to disclosure regulations beyond those of the SEC; regulations adopted in the European Union, countries outside the EU and in some states, such as California, could be applicable. And some aspects of those regulations are more sweeping—or just different—than those recently adopted by the SEC. For example, the EU employs the concept of “double materiality,” meaning the impacts of companies’ “business on the environment and society irrespective of the positive or negative effect of such impacts on companies’ financials”; by contrast, the SEC looks at materiality from the perspective of the reasonable investor making investment or voting decisions. In light of these and other differences, companies may face challenges in attempting to implement all of the applicable rules.  This essential new Cooley Alert, Comparing the SEC Climate Rules to California, EU and ISSB Disclosure Frameworks, from our ESG group provides some welcome guidance in sorting through the requirements of the different frameworks. 

/ March 20, 2024