The California Air Resources Board is seeking public feedback as part of its implementation of California’s pending GHG emissions and climate risk disclosure laws. These laws – the Climate Corporate Data Accountability Act (SB 253) and the Climate Related Financial Risk Act (SB 261) – are further discussed in this post.
Launched on December 15, CARB’s solicitation seeks feedback on 29 specific questions. These are organized under five main topics, which are further divided into 13 numbered questions (some with subparts). The three general topic areas are applicability, standards in regulation and data reporting. There also are sections specific to each of the Climate Corporate Data Accountability Act and the Climate Related Financial Risk Act.
More specifically, among other things, the solicitation seeks feedback on the following:
- What it means to do business in California.
- How to ensure that CARB’s regulations stay current and in alignment with standards incorporated into the Acts as they evolve and that reporting minimizes duplication of effort.
- The specifics of scopes 1, 2 and 3 reporting.
- Assurance providers and standards.
- Required disclosures and the reporting year and timeframe for biennial climate risk reporting.
- Current reporting practices.
Respondents also can provide any additional information they feel is important to inform CARB’s work to implement the Acts.
The solicitation is open until February 14, 2025. It can be accessed here.
The take-away: subject companies will want to consider whether to provide feedback to CARB, either directly or through their trade associations. We expect that CARB will receive an extremely large volume of responses, given the passion that climate disclosure generates on both the left and the right, albeit for quite different reasons. The anticipated imminent demise of the SEC’s climate disclosure rules for public companies is likely to add fuel to the number of comments. As a comparison, in its comment process, the SEC received more than 14,000 submissions (see this White Paper analyzing the submissions, which may provide some insight into who will respond to CARB’s consultation).
In other related news
The last couple of weeks have been a busy time for California’s landmark climate disclosure laws.
On December 5, CARB published an Enforcement Notice relating to the Acts, which is discussed in this Ropes & Gray post. In the Enforcement Notice, CARB indicated that it will exercise enforcement discretion for the first reporting cycle on the condition that entities demonstrate good faith efforts to comply with the requirements of the law. This enforcement discretion is aimed at supporting entities actively working toward full compliance. Therefore, for the first reporting cycle, CARB will not take enforcement action for incomplete reporting against entities, as long as they make a good faith effort to retain all data relevant to GHG emissions reporting for their prior fiscal year.
In response, California Senators Scott Wiener and Henry Stern (the sponsors of SB 253 and 261) sent a letter to CARB Chair Liane Randolph expressing serious concern about the Enforcement Notice. They asserted that the Enforcement Notice falls far short of full compliance with the Climate Corporate Data Accountability Act and urged CARB to take immediate action to comply fully and to clarify that it will issue implementing regulations by the (already-extended) July 1, 2025 statutory deadline (see this post).
Senators Wiener and Stern also expressed frustration at the perceived lack of progress CARB has made to implement the Act, noting that six months after the budget was passed appropriating funds for implementation – mainly hiring staff to craft the required regulations – CARB has yet to post a job description for that staffing. The letter does not ask for a written response, but instead threatens that the signatories will seek to bring CARB leadership before the California Legislature for Oversight hearings in 2025 if they fail to see timely action on hiring the staff needed to implement the Climate Corporate Data Accountability Act and the taking of other public steps to promulgate regulations to implement it according to the statutory timeline. In its subsequent solicitation for feedback, CARB noted it is already in the process of hiring staff, presumably in response to the Senators’ assertion.
This post comes to us from Ropes & Gray LLP. It is based on the firm’s memorandum, “California Launches Public Consultation on Climate Disclosure Laws, and Other Recent Developments,” dated December 18, 2024, and available here.