California Passes, Signs into Law Two Climate Disclosure Bills

On October 7, California Governor Gavin Newsome signed two laws that apply to public and private corporations, partnerships, limited liability companies, and other business entities meeting applicable revenue thresholds and doing business in California, regardless of the scope of their California-based operations. The first, the “Climate Corporate Data Accountability Act,” requires disclosure of Scope 1, Scope 2, and Scope 3 greenhouse gas emissions by entities with revenue of at least $1 billion dollars. For Scope 3 greenhouse gas emissions disclosures, the new law goes beyond the disclosures the Securities and Exchange Commission proposed in March 2022. The second, the “Climate-Related Financial Risk Act” requires disclosure of an entity’s climate-related financial risk and the measures adopted to reduce and adapt to the risk so disclosed by entities with revenue of at least $500 million dollars.

Click here to read a client alert from Dechert on the California climate disclosure bills.