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SB 253, Carbon Footprints, GHG Inventories, and GHG Reduction Plans

On March 6, 2024, the Securities and Exchange Commission (SEC) adopted final rules to require registrants to disclose certain climate-related information in registration statements and annual reports. Governor Newsom also recently signed into law Senate Bill (SB) 253: The Climate Corporate Data Accountability Act (CCDAA), which requires large public and private companies with annual revenues greater than $1 billion that conduct business in California to publicly disclose their greenhouse gas (GHG) emissions. Following the GHG Protocol, emissions of GHGs – carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and others – are quantified as belonging to a company or operation in three categories or “scopes”:

  • Scope 1 – GHGs emitted directly from a facility (e.g., on-site combustion in boilers and turbines);
  • Scope 2 – indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling; and
  • Scope 3 – indirect emissions not included in Scope 2, including emissions that occur in the value chain of the reporting company both upstream and downstream.

The CCDAA requires reporting of Scope 1 and 2 GHG emissions annually starting in 2026, with additional reporting of Scope 3 GHG emissions starting in 2027. Similar to the CCDAA, the already adopted European Union Corporate Sustainability Reporting Directive requires companies to report Scope 1, 2, and 3 GHG emissions starting in 2026. The recently adopted SEC Climate Disclosure Rule will also require companies to report Scope 1 and 2 GHG emissions in a phased-in compliance period starting in 2026, with the compliance date dependent on the registrant’s filer status and the content of the disclosure.

Many businesses already publicly disclose their GHG emissions using internationally accepted accounting protocols. Some of these businesses are requiring their suppliers and customers to provide Scope 1, 2, and 3 GHG emissions data as part of their business disclosures. Consumers and the public are increasingly advocating for greater transparency in corporate GHG emissions and GHG reduction efforts, emphasizing the growing importance of this issue in today’s business climate.

Yorke has experience developing GHG emissions inventories and reports for deliverables including:

  • Corporate carbon footprints using United States Environmental Protection Agency (U.S. EPA) and World Resource Institute GHG protocols and Intergovernmental Panel on Climate Change (IPCC) Standards;
  • Facility and corporate GHG inventory preparation, including Scope 1, 2, and 3 GHG emission calculations;
  • Carbon neutrality determinations for government agencies;
  • City and County plans and protocols, including Climate Action Plans;
  • Assistance establishing baseline GHG emissions and using standard methodology for choosing emission reduction goals; and
  • California Environmental Quality Act (CEQA) Air Quality/GHG Technical Reports.

    Main Office:

    31726 Rancho Viejo Rd. Suite 218
    San Juan Capistrano, CA 92675

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