Exciting developments are unfolding in California!

The state is taking an important role in promoting climate accountability through its Climate Accountability Package, which includes two pivotal bills:

"SB 253: Climate Corporate Data Accountability Act"

"SB 261: the Climate-Related Financial Risk Act."

‍These initiatives align with the global trend of implementing stricter sustainability legislation to meet the increasing demand for transparent and sustainable business practices. Both the current European Corporate Sustainability Reporting Directive (CSRD) and California's Climate Accountability Package share the goal of compelling companies to disclose their pollution data. However, in contrast to the European directive CSRD, the bills within the Climate Accountability Package specifically target large companies conducting business in California. California is setting an example, and this could serve as inspiration for similar efforts throughout the United States!

The bill shares common ground with the SEC’s climate proposal that is about to be finalized but reaches further on several fronts. California's Climate Accountability Package target both public and private companies and demand disclosure of scope 3 emission, independent if any reduction targets are set. The development requires large amounts of sustainability data to be collected and verified. Ethos is here to guide you through all new sustainability legislation applicable to your company and support you through the data collection with our digital platform Atlas.
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Why This Matters:

• Over 7,000 companies will be affected, aiming to result in a more sustainable environment and more responsible business practices.
• Investors can identify and assess companies’ sustainability performance, aligning with the global trend toward transparency.
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SB 253 (Climate Corporate Data Accountability Act):

• Large US companies in California (over $1 billion annual revenue) must report their greenhouse gas emissions, including scope 1, 2 and 3.
• Reporting starts for 2025 direct emissions in 2026 and 2026 indirect scope 3 emissions in 2027.
• Companies will need to share this data on a digital platform, undergo independent audits, and ensure it's easily understandable for all stakeholders.
• Non-compliance could lead to penalties.
  

SB 261 (Climate-Related Financial Risk Act):

• Large companies will have to disclose how climate risks impact financial risk and how they plan to mitigate them.
• The goal is to boost transparency and safeguard consumers from climate change's effects.
• Companies must submit reports by the end of 2024 if SB 261 becomes law.

Read more about the developments here.