Sustainability Initiatives
View this service
New Climate Disclosure Regulations Around the World
California has passed two landmark climate disclosure laws—SB253 and SB261—which will have significant implications for thousands of companies doing business in the state.
SB253 requires U.S.-based companies with annual revenues exceeding $1 billion that operate in California to report Scope 1 and 2 greenhouse gas (GHG) emissions starting in 2026, and Scope 1, 2, and 3 emissions starting in 2027, based on the previous fiscal year’s data.
SB261 mandates biennial public reporting on climate-related financial risks and mitigation strategies for companies with annual revenues exceeding $500 million, beginning January 1, 2026, using 2025 data as a baseline.
Both laws require that these disclosures be verified by independent third-party auditors, ensuring accuracy and credibility of the reported information.
Despite earlier discussions about potential delays, California regulators have confirmed that these timelines remain in effect. The California Air Resources Board (CARB) emphasized that good-faith efforts by companies will be a key factor in achieving timely compliance, particularly while rulemaking processes continue.
California’s leadership in climate regulation has global influence. With one of the largest state economies in the world, its new disclosure requirements are expected to set a benchmark beyond its borders, influencing corporate reporting practices nationally and internationally.
Recognizing the urgent need to address physical, human, and financial risks associated with climate change, California adopted SB253 and SB261 in 2023. As a result, thousands of organizations doing business in the state will now be required to provide comprehensive, ready-to-use reports on their carbon footprint—including upstream and downstream Scope 3 emissions across their value chains.
Source: Climate Related Financial Risk Disclosures: Draft Checklist
Spain has introduced RD 214/2025, part of its Climate Emergency Plan, requiring companies above certain thresholds to measure and disclose greenhouse gas (GHG) emissions. The regulation aims to enhance corporate accountability and accelerate Spain’s progress toward climate neutrality.
Who Must Comply
The rule applies to companies with:
Public entities and large event organizers (over 1,500 attendees) are also included. Small and medium-sized enterprises (SMEs) are indirectly affected through supply chain pressures.
Reporting Requirements
Companies must report standardized GHG emissions covering:
Scope 1 and 2 reporting is mandatory for 2025 data, with Scope 3 required for large entities starting in 2028.
Timeline and Plans
The first reports are due in 2026, covering 2025 emissions data. Companies must provide annual disclosures and publish five-year quantified GHG reduction plans online or via the national carbon register.
Penalties and Assurance
Non-compliance can result in financial penalties, exclusion from public procurement, and reputational risk. Large entities are also required to obtain third-party verification of their reports. Oversight is managed by MITECO, the Ministry for Ecological Transition and Demographic Challenge.
This proactive legislation positions Spain as a leader in corporate climate transparency and aligns business accountability with the country’s broader climate goals.
The U.S. Environmental Protection Agency (EPA) has proposed a rule that would suspend greenhouse gas (GHG) emissions reporting for the oil and gas sector until 2034 and eliminate reporting requirements entirely for all other industries. The move has sparked immediate concern from environmental groups and industry observers.
Since its inception, the Greenhouse Gas Reporting Program (GHGRP) has provided critical transparency on U.S. emissions, enabling regulators, investors, and the public to track year-over-year progress across sectors. The oil and gas industry, a major source of methane emissions, has invested millions in systems to measure and mitigate emissions across production, transport, and export operations. These efforts have not only reduced emissions but also positioned U.S. companies for success in global energy markets increasingly focused on environmental performance.
The proposal also threatens investment incentives. John Thompson, Technology and Markets Director at CATF, noted that greenhouse gas reporting is essential for claiming tax credits supporting carbon capture and hydrogen projects. “Repealing the GHGRP would undermine confidence in project eligibility, putting billions in private investment and hundreds of projects at risk, and slowing deployment of clean energy solutions,” he said.
CATF has pledged to continue engaging with policymakers and stakeholders to defend transparent GHG reporting and resist efforts that would weaken climate safeguards critical to both environmental accountability and market competitiveness.
Source: Proposed Rule: Reconsideration of the Greenhouse Gas Reporting Program
The U.S. Court of Appeals has declined the Securities and Exchange Commission’s (SEC) request to rule on the legality of its climate disclosure regulations, leaving the agency responsible for determining the rules’ future.
The SEC had sought a court decision that would have effectively resolved the legal status of the rules requiring public companies to report climate-related risks. Instead, the court instructed the agency to either revisit the regulations through standard rulemaking procedures or to continue defending them in court.
Standard rulemaking could be a lengthy process. It would require the SEC to publish a proposed rule with explanations and legal justifications, open a public comment period, respond to significant feedback, and finalize the rule, which could itself face further legal challenges.
These climate disclosure requirements, introduced in 2024 under former SEC Chair Gary Gensler, marked the first time U.S. public companies were mandated to report on climate-related risks, corporate plans to address those risks, financial impacts of extreme weather events, and in some cases, greenhouse gas emissions from operations.
The rule immediately faced legal opposition, with nine petitions filed within ten days of its release. Key challenges included a lawsuit led by 25 Republican state attorneys general, coordinated by Iowa AG Brenna Bird, and a motion for a stay by the U.S. Chamber of Commerce. The cases were consolidated in the Eighth Circuit.
In April, the SEC paused implementation of the rule pending review of the legal challenges, and in August, the agency formally defended the rule in court, arguing that the disclosures are “directly relevant to the value of investments” and fall within its authority.
Following a change in administration and Gensler’s departure, the SEC announced it would no longer defend the rule, requesting in July that the court proceed with the litigation instead. Commissioner Caroline Crenshaw, the lone remaining supporter of the rule, criticized the move, asserting that the agency was avoiding the proper procedural steps required to rescind the rule.
In its latest order, the court declined to grant the SEC’s request for a definitive ruling. The petitions will remain on hold until the agency either revisits the rules through notice-and-comment rulemaking or renews its defense in court.
Source: SEC Votes to End Defense of Climate Disclosure Rules
