Navigating California's SB 253 Law: A Leap Towards Climate Accountability
Unveiling the California Climate Corporate Data Accountability Act
California has always been at the forefront of climate policy, and the introduction of the SB 253 law cements its pioneering position further. Known as the Climate Corporate Data Accountability Act, this legislation is part of the broader California Climate Accountability Package, which also includes SB 261. Governor Newsom signed these into law on October 7, 2023, heralding a new era of corporate responsibility towards climate change.
Key Takeaways from SB 253:
Transparency in Emission Reporting:
Corporations operating in California with global revenue exceeding $1 billion are now mandated to report both their direct (Scope 1 & 2) and indirect (Scope 3) emissions.
The reporting aligns with globally recognized standards under the Greenhouse Gas Protocol, ensuring consistency and comparability across corporate emission disclosures.
Compliance Timeline:
Come 2026, companies will kickstart their reporting journey by disclosing their Scope 1 & 2 emissions for the previous year.
By 2027, the scope broadens as Scope 3 emissions reporting comes into play, allowing for a more comprehensive view of corporate carbon footprints.
Verification is Key:
A vital aspect of SB 253 is the requirement for third-party verification. This includes limited assurance for Scope 1 & 2 emissions by 2026, escalating to reasonable assurance by 2030. Scope 3 emissions require third-party limited assurance beginning in 2030.
Penalties Await the Non-Compliant:
A strict compliance structure is set, with non-compliance potentially resulting in administrative penalties. The fines are capped at $500,000 per reporting year, ensuring companies stay on track with their reporting obligations.
Digital Platform for Public Disclosure:
The state will commission an “emissions reporting organization” by January 1, 2025, to develop a digital platform for public emission disclosures, funded by an annual fee from the reporting entities.
California’s SB 253 law is not just a state initiative but a signal to the corporate world nationwide and globally about the significant role they play in climate accountability. More than 5,000 organizations are anticipated to be impacted by this legislation, setting a robust precedent for climate reporting and corporate accountability in the journey towards a net-zero carbon economy.
The SB 253 law is a bold step towards making California a net-zero carbon economy. It emphasizes the critical role of corporate transparency in carbon emissions, helping stakeholders make informed decisions. This legislation is a call to action for corporations in California and beyond, encouraging a collective stride towards mitigating climate change.
If you think you’ll be impacted by SB 253, give us a call on 323-393-0375 and see how much Sunistics can reduce your emissions - and electricity costs!