Manatt Energy and Environment Partner David C. Smith wrote an article for the Trends publication of the American Bar Association Section of Environment, Energy, and Resources about California’s unprecedented climate disclosure laws.
The state and the Securities and Exchange Commission have proposed or implemented broad requirements for businesses to document and disclose their emissions as well as climate-related material financial risks. Smith said there has been less attention paid to the latter type of disclosure due in part to its subjectivity, but with climate advocates and legislators voicing outrage over the SEC removing part of its disclosure mandate in its final rule, he said “this new focus and scrutiny could have dramatic regulatory implications for disclosures” under both the SEC’s and California’s rules.
Smith also said many entities have taken a “wait-and-see posture” while the laws have played out. However, the necessary assessments, information-gathering and review processes can take more than a year, and Smith said gathering required third-party attestation can take even longer.
“Litigation challenges and partisan blustering from both sides of the aisle notwithstanding, California's double-down on forging ahead with SB 253 and SB 261 unabated should be a wake-up call to one and all that compliance mandates are not just inevitable, they are here,” he said.
Read the full article here.