California has enacted new climate legislation that will require thousands of public and private companies that conduct business in the state to disclose their Scope 1, 2, and 3 greenhouse gas emissions and climate-related financial risks. Under the new law:
- Public and private companies operating in California that generate at least $1 billion in annual revenue are required to report their Scope 1 and Scope 2 greenhouse gas emissions beginning in 2026, and their Scope 3 greenhouse gas emissions beginning in 2027; and
- Public and private companies operating in California that generate at least $500 million in annual revenue are required to disclose climate risks beginning in 2026.
The new law, particularly for private companies that are not accustomed to mandatory disclosures of any kind, will impose significant compliance burdens and costs.
See our legal alert for more information on the new law.