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On October 7th, California Governor Gavin Newsome signed the Climate Corporate Data Accountability Act (CA SB 253).
The climate-focused legislation will impact thousands of companies, both public and private operating in California. This article will breakdown each legislation and answer the key questions organizations are asking themselves as the journey to California’s new climate legislation begins.
The Climate Corporate Data Accountability Act (CA SB 253) requires both public and private companies meeting revenue requirements and operating in the state of California to report on Scope 1, 2 and 3 emissions.
CA SB 253 affects corporations, limited liability companies, other business entities and specified partnerships with total annual revenues greater than $1 billion that do business in California.
CA SB 253 requires reporting companies to obtain an annual assurance report conducted by an independent third-party assurance provider. The report must be disclosed in a public place that maximizes access for consumers, investors and other stakeholders in a manner that is easily understandable and accessible, such as a company website.
CA SB 253 reporting will use the Greenhouse Gas Protocol (GHGP) and associated guidance framework.
While neither bill explicitly defines “doing business” in California, the California Franchise Tax Board offers some guidance. According to their website, they consider you “doing business” in California if you meet any of the following criteria:
Organizations impacted by CA SB 253 need to start preparing for the California climate disclosure immediately. By properly preparing for the disclosures, your organization will have stronger controls over emission data and reporting and avoid the risks and penalties associated with non-compliance.
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How Can Schneider Downs Help?
Schneider Downs can help organizations identify material climate-related financial risks and create an accompanying report in line with Task Force on Climate-Related Financial Disclosures TCFD recommendations. In addition, our team can help develop a greenhouse gas inventory and calculation process, as well as eventual limited assurance on the calculations.
If you have any questions about CA SB 253 0r CA SB 261, please our Senior ESG & Sustainability Manager Matt Hartman at [email protected].
With our industry expertise and extensive knowledge of the risk advisory landscape, the Schneider Downs team can help your organization perform a gap assessment relative to the finalized regulation, suggest areas of improvement and meet disclosure requirements.