California Delays Implementation of Climate Corporate Data Accountability Act

July 17, 2024 - California has announced a delay in the implementation of key provisions of the Climate Corporate Data Accountability Act, impacting how reporting entities disclose their greenhouse gas emissions and climate-related financial risks.

The amendments to Sections 38532 and 38533 of the Health and Safety Code (available here) highlight significant changes to the reporting requirements for entities operating in the state. One notable change is the postponement of the initial deadline for covered entities to prepare their climate-related financial risk reports from January 1, 2026, to January 1, 2028. This delay provides organizations with additional time to assess and disclose their climate-related financial risks effectively.

The revised regulations now mandate reporting entities to measure and report their emissions of greenhouse gases in alignment with the Greenhouse Gas Protocol standards and guidance. This includes detailed calculations for scope 3 emissions, emphasizing the use of primary and secondary data sources to ensure accurate reporting. Additionally, the amendments introduce modifications to the fee payment structure, shifting the requirement for covered entities to pay a fee upon filing their disclosure to the state board. Instead, the bill authorizes the state board to contract with a climate reporting organization to oversee the implementation of the disclosure requirements.

The changes in the legislation aim to streamline the reporting process by allowing reports to be consolidated at the parent company level, reducing administrative burdens for subsidiaries of larger entities. The state board is tasked with developing and adopting regulations by January 1, 2027, to ensure compliance with the revised requirements.