Summary: US Climate Disclosure Mandates


Summary:  U.S. Climate Disclosure Mandates

updated April 11, 2024

 

US SEC Final Rule:

The Enhancement and Standardization of Climate Related Disclosures for Investors

California SB 253: 

Climate Corporate Data Accountability Act

 

California SB 261:

Greenhouse Gases; Climate Related Financial Risk

 

Status:

Enacted March 6, 2024

Voluntarily stayed April 4, 2024, pending review by the US Court of Appeals for the Eighth Circuit

Status:

Enacted October 7, 2023

 

Status:

Enacted October 7, 2023

Companies effected:

United States public companies, with required disclosures based on registrant category:

  • Emissions disclosures:  LAF, AF (non-SRC or EGC)
  • Other disclosures: LAF, AF, SRC, EGC, NAF

[See below for definitions]

Companies effected:

United States entities with annual revenue exceeding $1 billion and doing business in California

 

Companies effected:

United States entities with annual revenue exceeding $500 million and doing business in California

Emissions Disclosures:

Detailed report of Scope 1 and Scope 2 corporate emissions, if material.  Scope 3 emissions reporting is omitted.

Emissions Disclosures:

Detailed report of Scope 1, Scope 2 and Scope 3 corporate emissions. 

Emissions Disclosures:

NA

Other Disclosures:

  • Climate-Related Risks:
  • Physical Risks
  • Transition Risks
  • Impacts of Climate-Related Risks on Strategy, Business Model and Outlook:
  • Material Impacts
  • Transition Plan
  • Scenario Analysis
  • Internal Carbon Pricing
  • Governance of Climate-Related Risks
  • Risk Management
  • Goals and Targets

Other Disclosures:

NA

Other Disclosures:

Detailed report on climate related financial risks, and measures it has taken to reduce these risks

 

Safe Harbor for Disclosures

Safe Harbor works like “forward-looking statements” safe harbor under US securities law and covers:

  • Transition Plan Disclosure
  • Scenario Analysis Disclosure
  • Internal Carbon Pricing Disclosure
  • Goals and Targets Disclosure
NANA

Compliance Deadlines:

See below

 

 

Compliance Deadlines:

Beginning in 2026, only Scope 1 and 2 emissions must be reported.  Beginning in 2027, Scope 3 emissions must be reported within 180 days of reporting Scope 1 and 2

Compliance Deadlines:

Beginning in 2026

Reporting standards:

The SEC Rule is modeled on concepts adopted from the Greenhouse Gas Protocol (GHG) and the Task Force on Climate-related Financial Disclosures(TCFD)

Reporting standard:

Greenhouse Gas Protocol (GHG), including Corporate Standard and Value Chain

Reporting standard:

Task Force on Climate-related Financial Disclosures (TCFD) or similar, including the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards, as issued by the International Sustainability Standards Board (ISSB)

Assurance:

See below

Assurance:

2026 Limited Assurance on Scope 1 and 2

2030 Reasonable Assurance on Scope 1 and 2 and Limited Assurance on Scope 3

Assurance:

Not required

Reporting method:

With other required SEC reporting (annual reports and registration statements)

Reporting method:

Digital platform run by California and accessible to the public

Reporting method:

Submit to California Climate-Related Risk Disclosure Advisory Group and post on reporting entity public website

Reporting frequency:

Annual

Reporting frequency:

Annual

Reporting frequency:

Biennial

Penalties:

Numerous under US securities laws

Penalties:

California Air Resources Board (CARB) may impose penalties up to $500,000 in any year for violations

Penalties:

CARB may impose penalties up to $50,000 in any year for violations

 

       

SEC Final Rule – Companies Effected Definitions

  
 

The following definitions set forth public float and annual revenue requirements for each registrant category; please see applicable SEC rules and regulations for additional requirements that may apply: 

 

LAF = Large Accelerated Filer:                      Pubic float ≥ $700M, no revenue threshold

AF = Accelerated Filer                                     Public float between $75-700M and ≥ $100M revenue

SRC = Smaller Reporting Company            Public float < $250M, no revenue threshold

                                                                                Public float < $700M and < $100M revenue

EGC = Emerging Growth Company            Revenue < $1.235B 

NAF = Non Accelerated Filer                         Public float <$75M and <$100M revenue

 

 

 

 

SEC Final Rule – Compliance Dates

Registrant TypeDisclosureDisclosureEmissions DisclosureEmissions AssuranceEmissions Assurance

Electronic Tagging

 

 Reg. SK and SX Disclosures (except as otherwise noted)Items 1502(d)(2), 1502(e)(2) and 1504(c)(2)*Scope 1, 2Limited AssuranceReasonable AssuranceInline XBRL
       

LAF

 

FYB 2025FYB 2026FYB 2026FYB 2029FYB 2033FYB 2026

AF (non-SRC or EGC)

 

FYB 2026FYB 2027FYB 2028FYB 2031NAFYB 2026
SRC, EGC and NAFFYB 2027FYB 2028NANANAFYB 2027

 

*Item 1502(d)(2) relates to quantitative and qualitative disclosure on material expenditures incurred and material impacts on financial estimates and assumptions that, in management’s assessment, directly result from activities to mitigate or adapt to climate-related risks; Item 1502(e)(2) relates to quantitative and qualitative disclosure of material expenditures incurred and material impacts on financial estimates and assumptions as a direct result of any disclosed transition plan; and Item 1504(c)(2) relates to disclosure on any material expenditures and material impacts on financial estimates and assumptions as a direct result of disclosed targets or goals or the actions taken to make progress toward meeting the target or goal.
April 2024