Our Environment, Land Use & Natural Resources Group explains how – if approved by the governor – the deadline to set precise compliance dates for the Climate Corporate Data Accountability Act (CCDAA) and Climate-Related Financial Risk Act (CRFRA) will be delayed by six months.
- The California Air Resources Board’s (CARB) rulemaking deadline would be extended six months for both the CCDAA and CRFRA
- The schedule for Scope 3 reporting would be determined in 2025 CARB rulemaking
- Reports could be made by just the parent company instead of each subsidiary
Delayed reporting deadlines are expected for California’s climate disclosure bills, SB 253, the Climate Corporate Data Accountability Act (CCDAA), and SB 261, the Climate-Related Financial Risk Act (CRFRA). This update comes as no surprise – in Governor Gavin Newsom’s signing messages on both the CCDAA and the CRFRA, he expressed concern over the feasibility of the implementation and compliance timelines contained in the bills’ texts.
On August 31, 2024, the California legislature passed SB 219, which, if signed by the governor, would effectively delay the initial implementation of both laws by six months. Newsom now has until September 30 to sign or veto the bill.
SB 219 modifies the original bill texts for both the CCDAA and CRFRA to extend the California Air Resources Board (CARB) rulemaking deadline by six months to July 1, 2025. Entities will still be required to make their first disclosure of Scopes 1 and 2 emissions sometime in 2026, and Scope 3 emissions disclosures sometime in 2027, pursuant to deadlines specified in the 2025 CARB rulemaking.
SB 219 also makes the following substantive revisions to the CCDAA and CRFRA that are relevant to companies with reporting responsibilities: (1) adding the option for reports by the parent company only, so that a qualifying subsidiary of a qualifying parent company does not need to submit a separate disclosure report; (2) modifying the Scope 3 emissions reporting timeline to use a scheduled approach that will be specified in the forthcoming CARB regulations; and (3) removing the requirement that an entity’s annual administration fee be paid to CARB upon disclosure. The scheduled approach is designed to replace the original 180-day disclosure timeline for Scope 3 emissions following disclosure of Scopes 1 and 2 emissions. The schedule is yet to come – it will be developed as part of CARB’s rulemaking under the CCDAA and CRFRA.
More information about the CCDAA and CRFRA can be found in our original advisory, “California’s Climate Disclosure Requirements and Their Far-Reaching Effects.”
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