In a move to continue progress on increasing transparency and accountability in corporate GHG emissions reporting, the states of New York and Colorado have recently introduced legislation that closely resembles California’s Senate Bill (SB) 253, also known as the Climate Corporate Data Accountability Act.
California’s SB 253, passed in 2023, requires companies with over $1 billion in annual revenue that do business in California to disclose their carbon emissions data. This includes scope 1, 2 and 3 emissions, which cover direct emissions from company operations, indirect emissions from purchased electricity, and indirect emissions from the company’s value chain, respectively. SB 253, which goes into effect in 2026, aims to provide investors, policymakers and the public with accurate and consistent information about corporate carbon footprints. Rulemaking is still in progress but mandated by the California Legislature for completion by July 1, 2025.
In early 2025, New York and Colorado introduced similar bills, signaling a growing trend among states to mandate corporate carbon accounting. These bills, if passed, would require large companies doing business within these states to disclose their greenhouse gas emissions data, following similar reporting standards as outlined in California’s SB 253. If passed, New York’s bill, SB S3456, would go into effect in 2027 while Colorado’s bill, House Bill (HB) 25-1119, would go into effect in 2028. Of note, New York’s State Assembly failed to pass SB S897A, which had similar provisions to the newly introduced legislation, in its 2024 legislative session. That bill died in the New York Senate Finance Committee after reaching only 25% progression through the legislative process.
The introduction of these bills highlights how states intend to step in to increase mandatory disclosures in the absence of a federal climate policy. By requiring companies to disclose their emissions data, these laws aim to encourage corporate accountability, incentivize emissions reductions and provide investors with the information they need to better inform their investment decisions.
However, the future of state-level climate mandates remains uncertain and, even if passed, legal challenges are likely to arise – creating long-term uncertainty for businesses navigating compliance. The coming months will be critical in determining whether state-driven climate policies continue to gain traction or face pushback due to the complicated political landscape. Companies should closely monitor these developments to adapt their sustainability strategies accordingly. Stay tuned.
Marisa Flower
Sustainability Director