CP Daily Newsletter – October 22, 2025 – Carbon Pulse
California Advances Landmark Climate Disclosure Bills,Setting New Standard for Corporate Accountability
Table of Contents
California Governor Gavin Newsom signed into law two significant bills on October 21,2025,poised to dramatically reshape corporate climate reporting and supply chain due diligence. Senate Bill 253 and Assembly Bill 1300, collectively, will require thousands of companies doing business in California to disclose their greenhouse gas emissions and assess climate-related financial risks, establishing the state as a global leader in environmental transparency.
Senate Bill 253: Thorough Emissions Disclosure
Senate Bill 253, the Climate Corporate Data Disclosure Act, mandates that companies wiht annual revenues exceeding $1 billion report their Scope 1, Scope 2, and Scope 3 greenhouse gas emissions begining in fiscal year 2026. Scope 1 emissions cover direct emissions from owned or controlled sources, Scope 2 encompasses indirect emissions from purchased electricity, and Scope 3 includes all other indirect emissions in a company’s value chain – from suppliers to product use and end-of-life treatment.
The bill adopts the Greenhouse Gas protocol, a widely recognized international standard, for emissions accounting. Reporting will be verified by self-reliant third parties, ensuring data accuracy and reliability. Failure to comply could result in penalties, though the specific enforcement mechanisms are still being developed by the California Air Resources Board (CARB).
assembly Bill 1300, the California Climate Financial Risks act, requires companies to disclose climate-related financial risks in their annual reports, mirroring recommendations from the Task Force on Climate-related Financial Disclosures (TCFD). This includes identifying physical risks – such as damage to assets from extreme weather events – and transition risks – stemming from policy changes and shifts in consumer behavior. Reporting under AB 1300 will begin in 2026.
The legislation aims to provide investors and stakeholders with a clearer understanding of how climate change could impact a company’s financial performance. It also seeks to incentivize companies to proactively manage these risks and invest in climate resilience.
These bills are a critical step forward in California’s fight against climate change. They will empower investors and consumers to make informed decisions and hold companies accountable for their environmental impact.
Impact and Implications
The passage of these bills is expected to have a ripple effect beyond California. Given the state’s economic size and influence, many companies will likely adopt the new reporting standards globally, even if not legally required.This could significantly increase the availability of comparable climate data, facilitating more effective investment decisions and driving greater corporate action on climate change.
Though, challenges remain. Calculating Scope 3 emissions, in particular