Navigating SB 253 and SB 261: California’s new climate laws

What are California’s climate laws SB 253 and SB 261?

The impact of climate action in California has gained attention worldwide, given the state’s status as the world’s fifth-largest economy. As a result, the recent passing of corporate climate accountability laws in the state has attracted considerable global interest.

SB 253 and SB 261, both applicable to companies “doing business” in California, mandate thousands of companies to disclose their Scope 1, 2, and 3 greenhouse gas emissions as well as climate-related financial risks. The latter of the two, SB 261, leverages the frameworks and disclosure guidance established by the Task Force on Climate-related Financial Disclosures (TCFD) and will require companies to publish publicly available biennial qualitative reports on climate-related financial risk and the strategies implemented to mitigate and adapt to such risks. 

While these bills primarily target US-based companies operating in California, they align with a worldwide trend towards implementing comprehensive climate reporting regulations. This movement includes initiatives such as the SEC’s proposed climate disclosure rule in the US and the Corporate Sustainability Reporting Directive (CSRD) in the EU. Similar to the EU’s approach, California has adopted an inclusive strategy, requiring disclosures from any company conducting business within the state rather than solely focusing on those with headquarters or the bulk of their operations located there.

Key highlights of California’s climate laws:

• SB-253 will impact over 5,000 companies and SB-261 will impact over 10,000 companies
• Companies will have to provide disclosures on greenhouse gas emissions (scope 1, 2, and 3)
• Meet assurance requirement for scope 1, 2, and potentially scope 3 GHG emissions
• Report with TCFD-aligned climate-related financial risk disclosure requirements

An overview of California’s climate laws:

How can Position Green help?

Not sure where your organization stands on the latest legislation? Position Green’s team of experts can help you navigate the increasingly complex regulatory landscape so there’s no disruption in your business as well as guard rail any upcoming regulation. Schedule a call today.

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