Proposed US Climate-Related Disclosures – Looking Beyond The SEC

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Proposed US Climate-Related Disclosures – Looking Beyond The SEC

Corporations are eagerly awaiting finalization of the SEC’s proposed climate disclosure rule, which is expected to come by mid-2023. While the SEC’s proposal has garnered much attention – resulting in over 14,000 comments – several other governing bodies have also tendered pieces of legislation that, if passed, would significantly impact subject firms. Some significant examples are:

  • California’s Climate Accountability Package. In January 2023, three Californian senators introduced a Climate Accountability Package to the State Senate. The framework is comprised of three bills: the Fossil Fuel Divestment Act (SB 252), the Climate-Related Financial Risk Act (SB 261) and the Climate Corporate Data Accountability Act (SB 253). The latter two bills, which respectively apply to firms with more than $500 million or $1 billion in total revenues and that do business in California, go above and beyond some of the requirements in the SEC’s plan. For example, SB 253 proposes that relevant organizations report on enterprise-wide Scope 1, 2 and 3 emissions. These emissions would have to be verified by a state-established registry or a state-approved third-party auditor. SB 261 would require firms to produce annual climate-related financial risk reports by end of 2024. The California legislature is expecting to hold a hearing on these bills on March 15, 2023.
  • Proposals impacting firms with significant US Government contracts. In November 2022, the Biden-Harris Administration issued a proposed rule that would require organizations with more than $7.5 million in annual contracts with the US government to disclose Scope 1 and 2 emissions. Firms with more than $50 million in annual contracts would also have to report relevant categories of Scope 3 emissions, as well as climate-related financial risks and science-based emissions targets. The comment period for this proposal concluded on February 13, 2023, and the Administration has yet to issue a final rule.
  • Legislation regulating large financial institutions. Three different federal agencies – the Office of the Comptroller, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board – have announced or published guidance for large financial institutions, defined as those with over $100 billion in assets, to manage exposure of climate-related financial risks. The comment period for the most recent of these proposals ended in February 2023, and the three agencies intend to coordinate when issuing final guidance.


Firms need to evaluate which of these proposals – if passed – they would be subject to do. To do so, they should both look to services firms to help them navigate the regulatory landscape and stay ahead of looming deadlines, and consider software solutions to help aggregate data and report GHG emissions and climate-related risks.

For more information about how to prepare for upcoming disclosure requirements, please see Verdantix Green Quadrant: ESG & Sustainability Consulting 2022, Verdantix Green Quadrant: Enterprise Carbon Management Software 2022 and Verdantix Buyer’s Guide: Carbon Management Software (2023).

Jessica Pransky

Principal Analyst

Jessica is a Principal Analyst in the Verdantix ESG & Sustainability practice, which she joined in 2022. Her current research agenda covers ESG reporting and data management software, ESG solutions for investors, and risk in ESG and sustainability. Prior to joining Verdantix, Jessica worked at Ramboll, focusing on ESG risk and opportunity identification for mergers and acquisitions, as well as EHS due diligence. Jessica has previously held roles evaluating water resource allocation for a state municipality and ensuring EHS compliance for GE Aviation. She holds a BS from Tufts University and an MEng from Johns Hopkins University focused on environmental engineering, as well as an MBA from Boston University.