Updates to US Climate Legislation

AUTHORS – Gary Davis and Palita Timm

Potential delay to California’s climate legislation

California’s recent budget cuts, driven by a mounting state deficit, have cast a shadow over key climate legislation, notably Senate Bills 253 (SB 253) and 261 (SB 261). California Governor Newsom’s decision to trim $2.9 billion from climate-related programs, including funds earmarked for the implementation of these bills, has raised concerns about potential delays in their enactment and enforcement.

SB 253 and SB 261, both integral components of California’s climate action agenda, aim to bolster sustainability reporting and disclosure requirements for businesses operating within the state. These bills represent significant strides towards enhancing transparency and accountability in corporate climate governance, aligning with California’s broader commitment to combating climate change. However, the budget cuts proposed by Governor Newsom present a formidable challenge to the timely implementation of SB 253 and SB 261. With reduced funding allocated towards climate initiatives, including resources designated for enforcing these legislative measures, the state faces hurdles in ensuring their effective rollout.

Despite the obstacles posed by budgetary constraints, there remains optimism for the eventual realization of SB 253 and SB 261’s objectives.

US SEC legislation likely to be passed this week but without Scope 3

The US SEC looks poised to adopt landmark greenhouse gas emissions disclosure requirements for US public companies and will vote in a key meeting scheduled for the first week of March. The full text on the final rules hasn’t been published yet but we do know that the requirement to report scope 3 emissions has been dropped. The scope 3 reporting requirement, which covers indirect emissions from business travel, supply chains and consumers, was unpopular among business groups with many lining up to take court action similar to what has taken place in California.

Our experience of similar legislation passing in the UK in 2013, which also required large companies to report scope 1 and 2 emissions, was a step change in the number of companies reporting GHG emissions with many moving on to measure and report key scope 3 sources after a few years of getting up to speed on reporting requirements.

Climate legislation coming to New York State

New York is considering the Climate Corporate Accountability Act (SB 2023-S897A), which would require US companies operating in New York and earning at least $1 billion in annual revenue to report scope 1, 2 and 3 GHG emissions. While this legislation is in an early stage, it mirrors California’s SB 253 and will introduce unique requirements to the GHG reporting process, including independent verification requirements and new implementation dates. This legislation will likely also impact companies across the country, considering New York’s annual GDP of $1.9 trillion (third highest in the US).

FAR Council still reviewing public comments on GHG reporting proposals

In November 2022, the Federal Acquisition Regulatory (FAR) Council published a proposed rule that would require federal contractors to disclose greenhouse gas (GHG) emissions and set reduction targets where they were in receipt of more than $7.5 million in annual federal contracts. The proposed rule would require contractors receiving more than $50 million annually to make enhanced climate disclosures and to set emission-reduction targets. The FAR Council is still reviewing public comments on the proposals and has yet to publish a final rule. In the meantime, a provision in the recently enacted National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2024 scales back the reach of the potential FAR rule on Department of Defense (DoD) contracts specifically, adding further complexity and uncertainty to the proposed FAR rule and the resulting requirements for impacted contractors.

Our tried and tested sustainability platform, which has been actively helping large companies in compliance markets for over fifteen years, can help customers wherever they are on their sustainability journey, particularly those that are introduced to the discipline following new legislation.


Reading Time: 4 Minutes

Date Published: March 1, 2024



The US climate regulatory landscape has been dynamic and fast-paced in the past month, with significant developments in various states and at the federal level. From potential delays to key California climate legislation due to budget cuts, to New York's consideration of the Climate Corporate Accountability Act mirroring California's efforts, and the impending adoption of greenhouse gas emissions disclosure requirements by the US SEC.


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