Newsom Signs Landmark Emissions Disclosure Laws – Why do you care?

As expected, and per this article, California Governor, Gavin Newsom, has signed SB-253 and SB-261.

SB-253 will require all companies (public and private) operating in CA with annual revenues exceeding $1b to disclose direct and indirect greenhouse gas emissions.

SB-261 will require companies that generate more than $500mm in annual revenue to publish climate-related financial risk reports, beginning in 2026.

If you are not running a company of the above size in CA, why should you care?

• ‘Indirect’ includes vendors. If you are a vendor, or a vendor to a vendor of a CA company, and you wish to remain so, you will need to address this.
• California is following similar laws now in the EU. Expect the US SEC to follow suit.
• Expect other countries and states to follow suit.
• Someone from your competitive peer group is going to get ahead of this and take market share.
• Someone from your competitive peer group is going to ignore this and lose market share.

For some, this will be an opportunity.  For others, it will be a confusing and financially painful problem.