On October 7, 2023, California’s Governor Gavin Newsom enacted two significant climate disclosure pieces of legislation, as reported by JD Supra. The legislations mandate Californian businesses with substantial annual revenues to make public their greenhouse gas emissions and devise a climate-related report.
The bills stipulate that, by January 1, 2025, businesses in California with total annual revenues exceeding $1 billion must disclose their greenhouse gas emissions. Notably, another requirement comes into effect on January 1, 2026, compelling businesses operating in California and with total annual revenues over $500 million to generate a report concerning their climate-related phenomena.
While these laws aim at fostering transparency on businesses’ environmental impact, Governor Newsom articulated some skepticism, primarily about the timing and cost related to their implementation. His reservations underscore a greater scrutiny concerning the balance between environmental responsibility and economic implications for businesses.
These enacted laws mirror the growing legislative trend across the globe, of mounting pressure on businesses for more climate-related disclosure. As such, businesses, especially those with substantial operations and revenues in California, are advised to keep abreast of these changes and prepare for impending reporting responsibilities.