California Governor Gavin Newsom recently pledged to sign two groundbreaking climate disclosure bills into law. These bills will mandate most large U.S. companies to reveal their complete emissions along their value chains and report on their financial risks and adaptation measures related to climate change.
The California Senate bills, SB 253 (“Climate Corporate Data Accountability
On August 29, 2023, the Environmental Protection Agency (EPA) announced its final Waters of the United States (WOTUS) rule. The new WOTUS rule makes major changes to clarify which wetlands are protected under the Clean Water Act (CWA). The new WOTUS rule is a direct response to the Supreme Court’s Sackett v. EPA decision, which
What is “ESG”?
“ESG” is perhaps the most divisive acronym of this year’s legislative session. But what does it mean?
“Environmental, Social, Governance” is a framework used to evaluate investments and business decision’s impacts on the environment and society. ESG criteria considers things like a company’s carbon footprint and employee wellbeing. ESG practices are being
As previously reported, California may soon pass the most stringent Environmental, Social, and Governance (“ESG”) disclosure requirements in the nation, surpassing even the current U.S. Securities and Exchange Commission (“SEC”) proposed rules.
Since the California Climate Corporate Data Accountability Act (aka “SB 253”) was introduced by Senator Scott Wiener, it has undergone several changes.
On May 25, 2023, the U.S. Supreme Court issued a 9-0 decision ending a nearly 16-year battle over the Clean Water Act’s (CWA) applicability to certain wetlands. In a five-justice majority opinion, the Court found that the CWA applies only to wetlands that are “as a practical matter indistinguishable” from “relatively permanent, standing or continuously
The California Climate Corporate Data Accountability Act (“SB 253”) was recently introduced and passed the state’s Senate Environmental Quality Committee on March 15, 2023. SB 253 aims to broaden Environmental, Social, and Governance (“ESG”) state disclosure requirements, targeting high earning companies. A similar emissions disclosure bill, the Climate Corporate Accountability Act, failed to pass the
California Governor Gavin Newsom recently signed three bills addressing carbon capture, utilization and storage (“CCUS”) and carbon dioxide removal (“CDR”). Collectively, these bills create a pathway for new regulation of CCUS and CDR projects, enabling them to become part of a solution for the State to meet aggressive carbon reduction / neutrality goals in 2030
An example of a new trend towards recognizing “Environmental, Social and Governance” (“ESG”) impacts from business operations is the recently introduced Climate Risk Disclosure Act of 2021 (“the Act”). As currently drafted, the Act would require significant new public disclosures from publicly traded companies regarding financial risks to their operations and profitability from climate change (e.g., air emissions, risks to facilities from storms, lending and insurance costs, etc.). Such disclosures could also indirectly impact non-publicly traded companies (domestic or foreign) who provide goods and services to publicly traded companies.
ESG is a topic increasingly accepted as central to legal, corporate and financial risk assessment and strategy for business leaders. The environmental stewardship aspect of ESG can be evaluated in part by measuring a company’s greenhouse gas emissions, energy efficiency and overall sustainability. Social values often consider a company’s relationship with its employees, diversity and inclusion policies, labor standards, and contributions to the communities in which it operates. Lastly, the governance facet of ESG considers a company’s leadership, internal structure, and core values.
Board-level executives across industries are grappling with how to address and leverage ESG related issues to both mitigate risks as well as create long-term value for their organizations. ESG is a complex topic attracting comment from various stakeholders including shareholders, customers, suppliers, financial lenders and employees. We are now seeing more ESG initiatives in legislation, as described below.