Cascale and Worldly have released an analysis focused on California’s new climate laws, which are poised to alter how corporations report their environmental impact in the US.
The analysis specifically addresses two key laws, the Climate Corporate Data Accountability Act (SB 253) and the Climate-Related Financial Risk Act (SB 261).
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These regulations will mandate that businesses operating in the state reveal their greenhouse gas (GHG) emissions and evaluate climate-related financial risks.
This analysis serves as a resource for companies, particularly those in the consumer goods sector, as they adapt to rising expectations for transparency and accountability regarding environmental practices.
California’s new climate legislation signifies a substantial change in corporate environmental obligations, surpassing existing federal standards and creating new guidelines for GHG emissions reporting nationwide.
As California sets this precedent, businesses across the US must brace for similar changes that could shape future national and international reporting protocols, with Cascale policy and public affairs senior director Elisabeth von Reitzenstein saying: “These laws are a critical step forward for addressing climate impacts, not just for the US but globally.
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By GlobalData“California’s Climate Accountability Package arrives at a pivotal time, as businesses worldwide face growing pressure to demonstrate their climate commitments. By requiring companies to disclose GHG emissions across their entire supply chain, California is setting a new benchmark for transparency and accountability.”
“While global harmonisation remains our ultimate goal, we acknowledge national and regional specifics to ensure progress. Strengthening enforcement at the national level, while drawing on established global standards and industry initiatives, will therefore be key to driving meaningful progress on combating climate change.”
The analysis outlines the key elements of the new laws. SB 253 targets companies with revenues exceeding $1bn and requires them to disclose Scope 1, 2, and 3 GHG emissions, while SB 261 pertains to firms with at least $500m, necessitating biennial submissions of climate risk assessments.
These regulations present challenges for businesses with intricate supply chains, including those in apparel, footwear, textiles, and the broader consumer goods sectors, as they must now monitor emissions throughout their entire value chain.
The report also discusses potential legal challenges to these laws and considers how the outcome of the recent US Presidential election influences broader federal climate regulations.
Worldly sustainability VP JR Siegel said: “The California climate laws are part of the growing global pattern of holding businesses accountable for their environmental impacts. To understand their impact reduction opportunities and report Scope 3 emissions more accurately, businesses need primary data from across their entire supply chains.”
As compliance deadlines approach, it is crucial for businesses to take necessary steps to prepare. Cascale and Worldly aim to aid companies in understanding and fulfilling these new requirements through practical solutions and strategic guidance.
Tools such as Cascale’s Higg Product Tools, Higg Facility Environmental Module (Higg FEM), available through Worldly, and Product Impact Calculator are designed to help businesses identify sources of supply chain emissions and recognize areas for improvement.
Recently, Cascale, in partnership with Worldly, released its annual update on its Higg FEM to offer more accurate and verified environmental data for the apparel supply chain.
