California proposes 2-year delay for its climate disclosure rules

Here’s a blog by John Jenkins:

According to this Arnold & Porter memo, the Newsom administration recently released proposed amendments to California’s climate disclosure legislation that would, among other things, delay implementation of the state’s climate disclosure regime for two years. This excerpt indicates that the problem is that finalizing implementing regulations by the original compliance date would be virtually impossible:

As enacted, Senate Bill 253 (SB 253), the Climate Corporate Accountability Act, required the California Air Resources Board (CARB) to develop and adopt new regulations to implement the requirements of the act by January 1, 2025, with Scope 1 and 2 emissions reporting to begin in 2026 and Scope 3 emissions reporting to begin in 2027. The Newsom administration’s proposal delays those deadlines by two years: CARB has until January 1, 2027 to adopt new regulations, with Scope 1 and 2 emissions reporting to begin in 2028 and Scope 3 emissions reporting to begin in 2029.

The new timeline would give CARB two additional years to undertake a robust rulemaking process to develop the implementing regulations. Please see our October 3, 2023 Advisory for our thoughts on what to look for in the CARB rulemaking process. Notably, CARB has not formally commenced SB 253 rulemaking and without this amendment would face a near-impossible deadline of finalizing implementing regulations by January 1, 2025.

Apparently, the Newsom administration’s amendments would also result in a two-year delay in the implementation of SB 253’s companion legislation, SB 261, which establishes the climate-related financial risk reporting requirements. That statute currently requires compliance starting on or before January 1, 2026, but the amendments would extend that compliance date to on or before January 1, 2028.