On October 7, 2023, California Governor Gavin Newsom signed into law two groundbreaking climate disclosure bills, SB253 (The Climate Corporate Data Accountability Act) and SB261 (The Climate-Related Financial Risk Act) (together, the “Laws”), which require major corporations doing business in the state to disclose their greenhouse gas (“GHG”) emissions and certain other climate-related risk data. These landmark Laws could form the latest chapter of the “California effect,” the phenomenon where strict environmental regulations passed by California ripple outward, spreading to other states and beyond. Although the US Securities and Exchange Commission (“SEC”) proposed a final rule (“SEC Proposed Rule”) on March 21, 2022 that would require certain public companies to make certain climate-related disclosures, the Laws have a more expansive reach, applying to most large US companies doing business in California, both private and public, so long as they exceed certain revenue thresholds.
