Global regulations are reshaping corporate sustainability. Are U.S. companies prepared for mandatory reporting?

The global ESG and sustainability reporting focus is shifting from being largely voluntary to a mandatory disclosure landscape. Underpinning this shift is a patchwork of global regulations with various environmental, social and governance (ESG) disclosure requirements. The jurisdiction, scope, and timeline for these regulations are incredibly dynamic challenging U.S. companies to determine the applicability and requirements. 

This article discusses the most impactful mandatory ESG and sustainability reporting regulations, which redefines the need for organizations to formalize their ESG reporting capabilities. This includes:  

1. California Climate Accountability Package: SB 253 California Climate Corporate Data Accountability Act  
2. California Climate Accountability Package: SB 261 Greenhouse Gasses: Climate-Related Risk  
3. California Voluntary Carbon Market Disclosure Rule: AB-1305 Voluntary Carbon Market Disclosures 
4. New York Climate Corporate Accountability Act  
5. New Jersey Climate Corporate Accountability Act 
6. Illinois Climate Corporate Accountability Act 
7. Corporate Sustainability Reporting Directive (CSRD)  

Organizations should determine which ESG and sustainability regulations apply to them and prepare now to protect against risks associated with inaction. Download the easy-to-follow checklist of regulatory applicability to understand if your organization is impacted.  

With a growing patchwork of state-led climate-related regulations emerging across the U.S., companies must prepare for compliance. California’s landmark Climate Accountability Package is setting a precedent, requiring detailed emissions disclosures from large companies operating in the state. Other states — including New York, New Jersey and Illinois — are following suit with their own climate transparency proposals. Even if your company isn’t directly subject to these laws, you may still need to furnish climate data to regulated suppliers or align reporting across multiple jurisdictions. Proactive engagement now allows companies to build scalable systems and controls that are cost-effective, operationally feasible and strategically advantageous. And with international frameworks like the European Union (EU) CSRD raising the bar globally, harmonizing your approach is no longer optional — it’s essential.

Get ahead of the changing regulatory landscape by acting today to understand how your organization could be impacted in the future. Lean on our specialists to guide the way and act now to protect and enhance your organization’s value. 

1. California Climate Accountability Package: SB 253 California Climate Corporate Data Accountability Act

For the latest information, please reference this article: California’s climate disclosure regulations: An update on SB 253 and SB 261.

2. California Climate Accountability Package: SB 261 Greenhouse Gasses: Climate-Related Risk 

For the latest information, please reference this article: California’s climate disclosure regulations: An update on SB 253 and SB 261.

3. California Voluntary Carbon Market Disclosure Rule: AB-1305 Voluntary Carbon Market Disclosures

Released alongside the California Climate Accountability Package in October 2023, the California Voluntary Carbon Market Disclosure Rule, also known as Assembly Bill 1305 (AB-1305), seeks to bring transparency to the voluntary carbon market by requiring specific annual disclosures for organizations who make carbon reduction claims, market or sell carbon credits, or purchase carbon credits. 

4. New York Climate Corporate Accountability Act

The Climate Corporate Accountability Act, introduced in February 2023, is a proposed amendment to the environmental conservation law which would require New York companies to report on and obtain assurance (ESG data audit) over their full GHG inventories, which include scope 1, 2 and 3. The act would require annual GHG emissions reporting to the state’s GHG emissions registry.

5. New Jersey Climate Corporate Accountability Act

On March 17, 2025, the New Jersey bill (S4117) was referred to the Senate Budget and Appropriations Committee. It mandates entities with over $1 billion in annual revenue that do business in New Jersey to publicly report on their full greenhouse gas (GHG) inventories, which include scope 1, 2 and 3.

6. Illinois Climate Corporate Accountability Act

The Illinois Climate Corporate Accountability Act (HB4268) is a recently enacted law in Illinois that mandates entities with over $1 billion in annual revenue that do business in Illinois to publicly report on their full greenhouse gas (GHG) inventories, which include scope 1, 2 and 3.

7. Corporate Sustainability Reporting Directive (CSRD)

The CSRD went into effect in the European Union (EU) in January 2023 requiring companies to report on the impact of corporate activities on the environment and society, while requiring disclosures on various governance topics. To ensure accuracy of the data reported, the CSRD requires assurance (ESG data audit) of reported information. The CSRD amends and builds on the Non-Financial Reporting Directive (NFRD) which required disclosure regarding ESG topics. The enhanced regulation will require disclosures according to the European Sustainability Reporting Standards (ESRS). The first set of ESRS were finalized in July 2023 with sector-specific standards expected in June 2024. The disclosure requirements of the CSRD are comprehensive and may differ depending on applicability.

Footnotes

[1] The five main dimensions from the NFRD, a precursor to the CSRD include disclosures regarding environmental protection, social responsibility and workforce treatment, respect for human rights, anti-corruption and bribery, and diversity of boards. The CSRD goes further than the NFRD and expands on the sustainability reporting standards of the NFRD. 

[2] General disclosures include double materiality, business model and strategy, climate transition plans, time-bounded targets, sustainability due diligence, information on own operations, value chain, business relationships and supply chain. Specific to the supply chain, documentation of adverse impacts and actions to prevent/mitigate risk is required. Environmental disclosures include disclosures covering each of the EU Taxonomy environmental objectives which are climate change mitigation (incudes scope 1, 2 and 3 GHG emissions), climate change adaptation, water and marine resources, biodiversity, and eco system, resource use and circular economy. Social disclosures include disclosures regarding diversity and inclusion, human rights, working conditions, health and safety, employee relations, pay gaps, related rights, workers in the value chain, affected communities, consumers and end-users. Governance disclosures include disclosures regarding policies, risk management and internal controls, ownership and structural transparency, independence and oversight, responsible business practices, ethics, anti-corruption and executive pay fairness. 

[3] Significant contractors are those that received between $7.5 million and $50 million in federal contract obligations in the prior federal fiscal year. 

[4] Major contractors are those contractors that received more than $50 million in federal contract obligations in the prior federal fiscal year.