California Governor Gavin Newsom this week announced surprise cuts to the California Air Resources Board (CARB) in his 2024-2025 budget proposal.The cuts were at Newsom's request. To eliminate California's $37.9 billion budget deficit.
If passed, the effect would be to delay implementation of the new Climate Change Corporate Data Responsibility Act (SB 253) and Climate-Related Financial Risks Act (SB 261), which CARB would oversee.
SB 253, passed in October, would require both private and publicly traded companies with California revenues of more than $1 billion to disclose comprehensive reporting on Scope 1 and Scope 2 emissions starting in 2026. It is mandatory to do so.
SB 261, also passed in October, requires companies with more than $500 million in revenue doing business in California to report their climate-related financial risks and mitigation strategies twice a year.
Before their passage, both laws had the support of companies like Apple, Google, and Salesforce. The state chamber of commerce opposes it.argued that the new rules were burdensome and costly.
Governor Newsom's new goal of eliminating the budget deficit resulted in the suspension of all newly signed legislation, including SB Sections 253 and 261. Governor Newsom's office did not respond to a request for comment.
According to a statement from state Sen. Scott Wiener (D), the author of SB 253, the $9 million CARB needs to implement climate change laws is about 10,000 times less than 1 percent of California's annual budget. Equivalent to 3.
„It is important that May's budget includes funding to implement these laws so that companies have the certainty they need to prepare to make these new disclosures,“ Wiener said. Ta. in a statement.
„Companies and investors cannot afford any delay in implementing California's climate change disclosure law,“ Steven Rothstein, managing director of Ceres' Sustainable Capital Markets Accelerator, said in the same release. Stated. “Not only do investors, consumers, and other stakeholders enjoy better rights, but businesses also deserve the standardized, consistent, economy-wide disclosure rules that this law promises.”
Emily Pearce, head of global policy at carbon accounting and consulting firm Persephoni, told GreenBiz that companies should continue to prepare for the 2026 disclosure schedule, despite the clearly difficult road ahead. .
“If a company is focused only on California and (SB 253) is the only reason to calculate its carbon footprint, it is time to look around and more comprehensively evaluate what is happening in the global market. Pierce is referring to European Union Corporate Sustainability Reporting Directive And Australia is planning to introduce its own version in the future. Corporate Information Disclosure Law.
GreenBiz will continue to closely follow this developing story.