by Ronald C. Chen, Raaj S. Narayan, and Carmen X. W. Lu
Left to Right: Ronald C. Chen, Raaj S. Narayan and Carmen X. W. Lu (photos courtesy of Wachtell, Lipton, Rosen & Katz)
Recently, California Governor Gavin Newsom signed into law Senate Bill 219, which applies broadly to public and private companies “doing business” in California. The law will require companies that have total annual revenues of over $1 billion dollars to disclose and independently assure their scopes 1 and 2 emissions (direct and purchased emissions) beginning in 2026 and to disclose scope 3 emissions (value chain emissions) beginning in 2027. In addition, companies that have annual revenues of over $500 million dollars will be required to prepare a climate-related financial risk report in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures beginning on or before January 1, 2026. Emissions disclosures will need to be submitted to the California Air Resources Board (“CARB”), or a non-profit emissions reporting organization designated by CARB, while climate-related financial risk disclosures will need to be publicly posted on the company’s website.