California's CARB Expands Emission Reporting Laws, Affecting Major Utilities and Manufacturers
California's climate reporting laws are set to expand, with the California Air Resources Board (CARB) publishing a preliminary list of entities required to report emissions and climate risk data from next year. This includes prominent electric utilities, energy companies, and manufacturers such as Pacific Gas and Electric, Southern California Edison, and Dominion Energy Services. The move aims to enhance transparency and drive emission reductions.
The list, published by CARB, is a significant step towards enforcing the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act. These laws are part of California's broader effort to combat climate change by mandating companies to disclose their greenhouse gas emissions and climate-related financial risks.
While no specific law firms have publicly commented on the list, international law firms with environmental or climate law specialists, such as Baker McKenzie, Norton Rose Fulbright, or Hogan Lovells, may provide guidance on the latest developments and legal requirements. These firms could also publish analyses and statements on the impact of these laws on affected companies.
Capstone, a consulting firm, believes companies will need to comply with these laws in the near term, anticipating significant compliance costs for regulated emitters. However, a bid for a preliminary injunction from the U.S. Chamber of Commerce was rejected by U.S. District Court Judge Otis Wright II, who argued the laws do not violate the First Amendment.
CARB's list may include companies that should be exempt or have unique structures, and it is seeking stakeholder feedback to validate its list through a voluntary survey tool on its website. Meanwhile, the U.S. Environmental Protection Agency's withdrawal of support for the U.S. Environmentally-Extended Input-Output model may affect companies' ability to calculate supply-chain greenhouse gas emissions. Additionally, the U.S. Securities and Exchange Commission's climate disclosure rule is facing challenges, potentially impacting corporate reporting.
California's climate reporting laws have withstood court challenges, paving the way for their implementation. As CARB refines its list based on stakeholder feedback, companies should prepare for compliance with these laws, which aim to increase transparency and drive meaningful action against climate change.
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