Issue link: https://resources.tangoanalytics.com/i/1522479
Key Activities to Prepare for SB 253 ACCURATELY CALCULATE AND TRACK EMISSIONS REGULARLY REPORT EMISSIONS TO INVESTORS AND REGULATORY BODIES DEVELOP AND MANAGE A STRATEGY TO REDUCE THOSE EMISSIONS Many companies already prepare voluntary sustainability reports. Utilizing these reports as a baseline, companies should evaluate the gaps where their current content and reporting processes do not meet new requirements. identify how you will address the gaps to comply and prioritize the areas that will need the most attention to collect more data or conduct further analysis. Conduct a Gap Analysis: California disclosures will demand added rigor and accuracy in reporting and will be subject to third-party assurance requirements (limited assurance initially, then reasonable assurance). As we move from a voluntary reporting landscape to a regulated one, emissions data will be treated in a similar manner to financial data. In order to comply with the GHG Protocol, Climate disclosures should be traceable at a granular level to each transaction, emission factor, calculation, and accounting method. Companies must engage a qualified assurance provider and integrate the new disclosures into their internal control processes. Get Audit Ready: Being able to count on an automated platform with clear metrics, defensible reporting, robust modeling, and identifiable risk and reduction targets is key. Use Reliable Carbon Accounting Software: If you've reported to CDP, or created internal sustainability reports in line with TCFD, SASB, or GRI you are at least part way there. Because the California bills are in part based on guidance from the TCFD, reviewing this framework and all the resources they have to offer is a great place to start. Lean on voluntary disclosures: TIPS TO SUCCEED The Governor has indicated that the bills may undergo further cleanup of language and some technical corrections to enhance the discretion and flexibility for CARB to implement the new law. One clarification to be on the lookout for is the definition of "doing business" in California, one of the criteria that must be met for companies that must comply. As the legislative text is currently written, the meaning of this is not yet clear ( The State of California Franchise Tax Board has a definition that could be used). As with other details, the CARB implementing regulations will provide further details on this going forward. It seems likely, however, based on the existing standards as set forth above, that the bar for "doing business in California" could be quite low. Stay Apprised of Changes: If you're a large company operating in California, you will need to begin gathering emissions data at the start of 2025 in order to meet reporting requirements in 2026. Know your Timelines: Sustainability & Energy Management Simplified