California Governor Newsom recently enacted two new pieces of legislation demanding that larger businesses operating in the state publicly disclose their greenhouse gas emissions, climate-related financial risks, and risk mitigation practices, starting from the year 2026. Both privately and publicly held companies will be affected by these new guidelines. The laws in question are SB 253, also known as the California “Climate Corporate Data Accountability Act” and SB 261, the “Climate-Related Financial Risk Act.”
The major goal of SB 253 is to ensure corporate responsibility towards climate change. The bill obliges companies to publicly report their greenhouse gas emissions, thereby encouraging transparency and a commitment to reducing their environmental footprint.
Its companion law, SB 261, focuses more on the financial implications of climate change for corporations. It mandates that companies reveal not only their potential financial risks related to climate change, but also measures taken to alleviate those risks.
The passage of these laws represents a significant step towards ensuring that corporations become more transparent and committed to fulfilling their environmental responsibilities. However, they also raise several questions about the role of regulation in mitigating climate change and how the legal sector will adapt to this changing landscape.
For further reading or more detailed information, refer to the original write-up on the legislative laws at JDSupra. Consultation with legal experts is advised to better understand the full extent of these laws and any impacts they may have on corporate operations or governance.