The regulatory landscape in the United States is evolving rapidly as lawmakers respond to growing concerns about climate change, chemical contamination, and resource management. Key developments in climate-related rules, PFAS regulation, and Extended Producer Responsibility (EPR) are transforming the way businesses operate, with significant implications across industries. Here’s what you need to know about these changes and when they take effect.
Climate Regulations
The U.S. is seeing significant developments in climate-related regulations at both the federal and state levels, focusing on increasing transparency and reducing greenhouse gas emissions. Two major regulatory initiatives are reshaping corporate climate strategies: the SEC’s proposed climate disclosure rules and California’s Climate Corporate Data Accountability Act (SB 253).
1. SEC Climate Disclosure Rules
The U.S. Securities and Exchange Commission (SEC) has new rules requiring publicly traded companies to disclose detailed information about their greenhouse gas emissions and climate-related risks. These disclosures are categorized into:
- Scope 1 and 2 Emissions: Direct emissions from company operations and indirect emissions from purchased energy.
The rule also mandates financial disclosures about how climate risks impact companies’ business models, strategies, and financial performance. Finalized in 2024, these rules aim to standardize climate reporting across industries, ensuring transparency for investors.
Timeline:
- FY 2025: Large accelerated filers
- FY 2026: Accelerated filers
- FY 2027: Non-accelerated filers, smaller reporting companies, and emerging growth companies.
2. California’s SB 253 and SB 261
California is leading at the state level with aggressive climate disclosure mandates. Signed into law in October 2023, the Climate Corporate Data Accountability Act (SB 253) requires companies doing business in California and earning over $1 billion annually to publicly disclose their Scope 1, 2, and 3 greenhouse gas emissions. The law aligns with global standards like the Greenhouse Gas Protocol and goes further by mandating third-party verification of reported data.
Complementing SB 253, SB 261 requires companies with $500 million or more in annual revenue to disclose climate-related financial risks and mitigation strategies.
Timeline:
- 2025: Large corporations must begin disclosing Scope 1 and 2 emissions.
- 2026: Scope 3 emissions reporting begins.
What This Means for Businesses
These regulations emphasize the need for comprehensive greenhouse gas tracking and robust climate risk strategies. Companies should:
- Establish systems to measure Scope 1, 2, and 3 emissions.
- Integrate climate considerations into risk assessments and financial planning.
- Align reporting with frameworks like TCFD (Task Force on Climate-related Financial Disclosures) and the Greenhouse Gas Protocol to streamline compliance.
Federal and state regulations collectively push for greater accountability and transparency, signaling a shift toward embedding climate considerations into business operations. Businesses failing to comply risk regulatory penalties and reputational damage in an increasingly climate-conscious market.
How Emerger Strategies Can Help
Our GHG Emissions Management Services help your business lead on climate action while aligning with the trusted GHG Protocol. We’ll guide you through:
🌍 Completing a comprehensive greenhouse gas (GHG) inventory.
🌍 Measuring your emissions across your operations and value chain.
🌍 Setting Science-Based Targets to drive meaningful progress.
🌍 Developing a strategic Climate Action Plan to reduce emissions and meet your goals.
As proud members of the Change Climate Project’s Service Provider Network, we also support brands aiming to achieve Climate Neutral Certification, ensuring your efforts resonate with consumers and stakeholders. Additionally, we provide expert consulting for companies responding to the Carbon Disclosure Project (CDP), enhancing transparency and credibility.
Take the next step toward climate leadership—partner with us to drive impactful results for your business and the planet.
