California climate disclosure bills – January 1, 2024 is first compliance deadline

California’s new suite of sweeping climate-disclosure bills is in place, and one of those, AB 1305, goes into effect January 1, 2024.

Under AB 1305, a business entity that sells or markets carbon offsets in California for the voluntary market must now disclose on its website certain details about the project that generated the credits. Those making climate-based marketing claims – such as “net zero emissions” and “climate neutral” – must disclose the factual basis for the claims. Further, AB 1305 imposes new rules on the purchasers of carbon credits.

Covered businesses will be required to comply with AB 1305 beginning January 1, 2024.

Beyond AB 1305, the two other new California climate disclosure bills also require in-scope public and private companies to disclose their climate-related data regarding their GHG emissions and climate-related financial risks.

Together, these bills codify industry and global climate policy trends calling for increased transparency through consistent disclosures of GHG emissions and climate strategy. Covered companies should proactively examine their climate strategy and policies and prepare to provide climate-related disclosures.

Find out more about these bills and their implications for your company in these concise publications:

• Governor Newsom enacts two California laws on disclosures of GHG emissions and climate-related financial risk, October 11, 2023
• California pursues greater transparency for corporate climate claims and businesses participating in voluntary carbon markets, October 26, 2023
• A brief look at our California Climate Related Disclosure capabilities

For more information about the implications of these sweeping new bills, please contact Kristy Balsanek, Global Co-Chair of our Environmental, Social and Governance practice.