California Governor Gavin Newsom has signed a new law that requires large companies operating in the state to disclose their value chain emissions and disclose financial risks related to climate. Despite earlier concerns about the deadlines, the law will keep its original schedule for starting reports. The bill, SB 219, amends previous laws, SB 253 and SB 261, originally signed into law in 2023. In California business income. They are required to report annually on their output everywhere. This includes direct emissions (Search 1), greenhouse gases from purchased energy (Search 2) and indirect emissions (Search 3), covering supply chains, business travel, travel of workers and others. SB 261, which addresses “Greenhouse Gases: Climate-Related Financial Risk,” would affect companies with profits of more than $500 million.
These businesses need to identify their financial risks related to climate and develop strategies to mitigate and adapt to these risks. When Governor Newsom first signed the bills in October 2023, he expressed concern about the cost and effectiveness of the deadlines. He proposed pushing back the start date for the declaration to 2028, citing the financial burden on businesses. But this amendment was not included in the final law. However, some corrections were made. The reporting period for Phase 3 emissions has decreased. Although it will still begin in 2027, companies will report on a schedule set by the California Air Resources Board (CARB) instead of 180 days after reporting for Phase 1 and Phase 2 submissions. In addition, the reform law could consolidate weather forecasting at the parent company level, reducing the burden on businesses. Companies also don’t ask for payment when they provide their information. The law gives CARB until July 1, 2025 to create regulations requiring companies to report Tier 1, 2 and 3 emissions six months after pre-arranged time. Despite these amendments, the 2026 reporting deadline remains, demonstrating California’s commitment to advancing climate responsibility.