New California climate law pulls in private companies
Companies not subject to the SEC’s proposed carbon reporting regime might be surprised to find the Golden State expects them to track emissions
Risk Advisory Partner Mallory Thomas sat down with The Wall Street Journal (WSJ) to discuss California’s landmark legislation requiring businesses, including those privately held, to begin reporting on emissions if they operate in California and have at least $1 billion in revenue. In addition to their direct emissions, the regulation will require businesses to account for Scope 3 emissions that are certainly “more nebulous and difficult to pin down” as WSJ notes.
With the pending SEC rules, the EU’s Corporate Sustainability Reporting Directive (CSRD) and the new California legislation, it is clear that companies must prepare for new reporting requirements.
Of course, most companies are not aware that these regulations will be applicable to them. As Thomas explained to the WSJ, this is going to lead to some real “oh crap” moments when middle market businesses realize they are on the hook to comply and they haven’t done the heavy lift to prepare.
