Governor Newsom has proposed that the implementation of California's mandatory climate disclosure laws--which apply to all companies doing business in California and earning more than $500 million in revenue--be delayed for two years. Specifically, companies earning more than $1 billion in revenue would not have to disclose Scope 1 and Scope 2 greenhouse gas emissions until 2028, and the disclosure of Scope 3 greenhouse gas emissions would be delayed until 2029. Similarly, for companies earning more than $500 million in revenue, they would not need to report climate-related risks until 2028. It should be emphasized, though, that this is merely a proposal--it has not yet been enacted by the California state legislature.

Nonetheless, this proposed delay is meaningful. It indicates that Governor Newsom and his administration recognize the significant burden that California's mandatory climate disclosure imposes on companies, and that they are cognizant and at least somewhat responsive to the concerns raised by businesses in connection with this law. Further, it also serves as another illustration of how mandatory climate disclosure laws in the United States have been weakened (or may be weakened)--akin to the omission of Scope 3 greenhouse gas emission disclosures from the final SEC climate disclosure rule. (This stands in marked contrast to the climate disclosure rules promulgated by the European Union.)

In any event, the response of the California legislature to this proposal will be illuminating--as, if enacted, this measure will significantly extend the applicable deadlines for mandatory climate disclosures under California's regulatory regime.

California lawmakers face pressure from Gov. Gavin Newsom (D) to delay the state’s first-in-the-nation climate disclosure laws when they return next month to finish their legislative session.

The governor has long raised concerns about the timeline for implementing the law (SB 253), calling its deadlines infeasible when he signed the measure last year. His administration has proposed changes that include a two-year delay for companies being required to report their greenhouse gas emissions, which would start in 2028.

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