California Governor Newsom publicly signed legislation SB 253 and SB 261 into effect on Saturday, October 7, 2023.

Are your products on the shelves of Target, Costco, Walmart, Safeway or other retailers? Are you a vendor for Google, Meta, Apple or other large companies that operate in California? Whether your company is privately held, based outside of California, or generates annual revenue under $500 million, SB 253 and SB 261 will likely still impact your business.

• SB 253 Climate Corporate Data Accountability Act: The Act applies to both public and private companies doing business in California. As companies with annual revenue above $1 billion will be required to publicly report their Scope 1 & 2 emissions, they will also be required to include Scope 3 emissions beginning with 2026 data. This means that if your company is part of the value chain of any company directly impacted by this disclosure requirement, reporting entities may request your company’s emissions data for their Scope 3 disclosures. Note, for financial institutions, Scope 3 includes financed emissions.
• SB 261 Greenhouse Gases: Climate-related Financial Risk: This Act applies to both public and private companies doing business in California. Companies with annual revenue above $500 million will be required to disclose climate-related financial risks* and the measures they have adopted to reduce and adapt to those risks, every two years. This means that if your company is part of the value chain of any company directly impacted by this requirement, reporting entities may request details about your company’s operations to assess climate-related risks in their supply chains.

Have customers or business partners who will need to disclose this data? Get started by identifying material risks and measuring your company’s emissions. Contact us to discuss what’s relevant to your business and how to prepare for compliance.

*Defined as “material risk of harm to immediate and long-term financial outcomes due to physical and transition risks, including, but not limited to, risks to corporate operations, provision of goods and services, supply chains, employee health and safety, capital and financial investments, institutional investments, financial standing of loan recipients and borrowers, shareholder value, consumer demand, and financial markets and economic health.”