California signed the Climate Accountability Package into law: Are you prepared for mandatory climate disclosure?

California Governor Gavin Newsom signed into law two landmark climate-related bills on October 7, 2023. The California Climate Accountability Package (CCAP) requires certain private and public U.S. companies that do business in California to provide climate disclosures. 

CCAP is the first piece of U.S. legislation that mandates corporate reporting of greenhouse gas (GHG) emissions and climate risks.

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‍SB-253: Climate Corporate Data Accountability Act

U.S. based companies doing business in California with over $1 billion in annual revenue will be required to disclose its annual GHG emissions in accordance with the GHG Protocol. Scope 1 and 2 will be required by 2026 and Scope 3 by 2027.

• Scope 1 Emissions - All direct greenhouse gas emissions that stem from sources that a company owns or directly controls, regardless of location.
• Scope 2 Emissions - Indirect greenhouse gas emissions from consumed electricity, steam, heating, or cooling purchased or acquired by a company, regardless of location.
• Scope 3 Emissions - Indirect greenhouse gas emissions (different from Scope 2) from sources the company does not own or directly control. This may include purchased goods and services, business travel, employee commutes, etc. 

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‍SB-261: Greenhouse Gases Climate- Related Financial Risk

U.S. based companies doing business in California with over $500 million in annual revenue will be required to publish climate risk reports on their website twice a year. The bill defines climate-related financial risk as material risk of harm to financial outcomes due to physical and transition risks.

Companies must leverage the frameworks and disclosure guidance established by the Task Force on Climate-Related Financial Disclosures (TCFD).

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The Road to Compliance

Climate mandates are now a reality in the U.S. -- but where do you start? It can feel overwhelming trying to find a place to start when you’ve never had to disclose climate risks or emissions before. Fortunately, no one expects you to comply overnight.

Although both SB-253 and SB-261 require disclosure starting in January 2026, it’s better to start your ESG journey now in order to understand what is required and build internal capacity to comply by 2026. 

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How Socialsuite Can Help

Socialsuite’s ESG and Materiality software paired with our expert team is ideal for companies who are just getting started. Our Five Stages of Maturity model will allow you to position yourself to do the required climate reporting stress-free, rather than having to do a quick sprint in 2025.

Over 100 public and private companies trust Socialsuite with their sustainability reporting. You can report faster and save money compared to traditional methods by partnering with us. Contact us to learn more about our solutions.

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