California's climate disclosure laws revamped: The ripple effects of SB 219 on corporate reporting and the climate disclosure arena

On Sept. 27, Gov. Gavin Newsom signed Senate Bill 219 (SB 219) into law, amending California’s climate-related disclosure laws SB 253 and SB 261. The new law is expected to have far-reaching impacts, both in the U.S. and globally. 

Impacts of SB 219 on California's climate disclosure laws 

The two climate-related disclosure laws work in tandem to advance corporate accountability and transparency. SB 253, or the Climate Corporate Data Accountability Act (CCDAA), requires that certain public and private companies that do business in California report on their Scope 1, 2, and 3 emissions.  

SB 261, also referred to as the Climate-Related Financial Risk Act (CRFRA), requires public and private companies that do business in California to disclose climate-related financial risks and measures taken to mitigate those risks. 

SB 219 includes several key provisions modifying the language of the CA climate-related disclosure rules as originally written. The revised language marks an important chapter in the state’s pursuit of a robust climate disclosure framework. Notable provisions of SB 219 with direct implications for the state’s established climate-related disclosure laws include: 

1. Delayed timeline for rulemaking. The new law gives the California Air Resources Board (CARB) six additional months to implement the corporate climate-related disclosure provisions under SB 253, moving the deadline from January 1, 2025, to July 1, 2025. Although the deadline for CARB to finalize rulemaking was extended, the deadlines for corporate disclosures still begin as planned in 2026. The timeline could be extended further depending on legislative and/or litigation-related challenges.  

2. Pathway for consolidated reporting. SB 219 includes a provision that authorizes disclosure reports for subsidiaries to be consolidated at the parent company level. With the consolidated reporting approach applicable to both SB 253 and SB 261, corporates may find opportunities for a streamlined pathway to compliance with simplified data collection and reporting processes. For organizations with global operations, these coordination efforts extend to ensuring alignment between this framework and the Corporate Sustainability Reporting Directive’s (CSRD) consolidated reporting requirements.  
3. Deferring to CARB on reporting procedures. Under SB 219, CARB can opt to contract with an outside emissions reporting organization to publicly post the disclosures. 
4. Adjusting annual fees. The new legislative language removes the requirement for the annual fee to be paid upon an entity's disclosure filing, leaving the decision in the hands of CARB.  

Based on implementation delays and ongoing litigation challenges, including from the U.S. Chamber of Commerce and the California Chamber of Commerce, adherence to the updated timeline is not guaranteed and is subject to further delay. ​ 

Key takeaways for corporates 

SB 219 highlights California's ongoing refinement of its climate disclosure laws in response to timeline and litigation challenges. Despite the possibility for future changes, companies potentially subject to SB 253 and SB 261 should keep in mind the implications of SB 219 for corporate operational and compliance processes, such as:  

1. Preparation is one of your greatest assets. Aligning and streamlining data collection and reporting processes across your organization is critical to maximizing efficiency and flexibility in satisfying the evolving rules of SB 253 and SB 261. Given new language authorizing consolidated reporting, organizations should identify and address any hindrances to emissions data gathering and reporting at the parent company level. 
2. Change is policy’s middle name. Having internal and external partners that focus solely on policy and regulatory changes is critical. Awareness around the potential for adjustments to key provisions, requirements, and associated deadlines can play a vital role in your organization’s ability to comply in a timely and effective manner.  
3. Align internal stakeholders early. Establishing consensus and consistency within your organization enables a smoother road to successful emissions data collection and reporting. Streamlining complex processes and securing internal buy-in for your organization’s compliance strategy can have profound impacts on the outcome.  

Though the overarching climate disclosure framework is still in its early stages, SB 219 will undoubtedly impact other regions and larger-scale jurisdictions. As these policies develop and mature, we can help companies adapt to further changes in corporate climate-related reporting standards. 

At Trio, our subject matter experts are committed to providing bespoke and actionable recommendations to guide corporates on their sustainability journeys and ensure timely and streamlined compliance with relevant regulations. 

To connect with our team, please reach out to Katie Smothers (Katie.Smothers@trioadvisory.com).