Timing for building climate reporting infrastructure

The Greenhouse Gas Protocol (GHG Protocol) just dropped its first update to #Scope2 guidance in a decade and if your company reports emissions from purchased energy, this will affect you. Here's what's changing: Under the current rules, companies can buy renewable energy certificates (RECs) from anywhere to offset their emissions — even if those RECs come from a different region with no connection to where they actually consume power. The new draft guidance closes this loophole by requiring RECs to come from the same region and time period as actual consumption. This is getting attention because of AI data centers (say, a Texas facility powered by fossil fuels buying solar credits from California), but the impact is far broader: Any company using market-based accounting for Scope 2 emissions will need to rethink their renewable energy procurement strategy. The proposed changes introduce stricter quality criteria, including hourly matching requirements and regional constraints. Translation: RECs will cost more, compliance will be more complex, and some current climate strategies won't meet the new standards. For procurement and sustainability teams, this reinforces something we've been saying for a while: Don't build your compliance strategy around shortcuts. Build it around transparency. When you have real visibility into your supply chain — when you know exactly where your energy comes from, what your Scope 2 footprint actually is, and how your purchasing decisions cascade through your operations — regulatory changes like this become adjustments, not crises. The public consultation period runs through December 19, with final guidance expected in 2027. Companies that wait until then to address these requirements will be playing catch-up. Those who invest in robust tracking and reporting infrastructure now will be ahead of the curve. DM me if you want to discuss how to future-proof your emissions reporting. #GHGProtocol #CarbonAccounting #SupplyChainTransparency #SustainabilityReporting #ProcurementTech #EmissionsTracking

Here's what sustainability teams need to know from CARB's second public workshop on California’s climate disclosure laws, SB 253 and SB 261, that took place last week. The takeaway was simple: if your company has operations or revenue tied to California, it's time to start preparing for mandatory climate reporting in 2026. Other key takeaways: 1. Deadlines are locked in. Climate risk reports (SB 261) are due by January 1, 2026. Emissions reports (SB 253) for Scope 1 and 2 are due by June 30, 2026. Scope 3 emissions reporting starts in 2027. 2. You won’t need emissions data for SB 261 in year one. These reports focus on climate-related financial risk. CARB is encouraging companies to follow the TCFD or IFRS S2 frameworks, but they’re allowing flexibility in the first round. If you don’t have emissions data or scenario analysis ready, you can still comply. 3. You will need emissions data and assurance for SB 253. Companies must report Scope 1 and 2 emissions with limited assurance starting in 2026. Scope 3 emissions will need to be assured beginning in 2030. CARB will not provide a list of approved auditors, but they will expect documentation and may review your assurance process. 4. Companies that have to report will also have to pay annual fees. These help fund CARB’s administration of the program. Right now, they’re estimating $3,106 per company for emissions reporting (SB 253) and $1,403 for climate risk (SB 261). If a company meets the criteria for both, it pays both. 5. It may not be immediately obvious which companies are subject to the law. CARB is compiling a public list of companies it believes will be required to report, but it’s not comprehensive. Even if your company isn’t on the list, you’re still responsible if you meet the thresholds. That includes companies with over $1 billion in revenue (for SB 253) or over $500 million (for SB 261) that are “doing business” in California, which includes having sales, employees, or a registered business presence in the state. We’re working with many clients to get ready. That includes emissions data management, climate risk reporting structures, and internal processes for assurance. These laws aren’t just about compliance — they’re about building true operational alignment around the energy transition. If your team is preparing, I’d love to hear how you're approaching it.

After clearing a legal challenge last week, California’s climate reporting policy is full steam ahead, and businesses have little time to prepare. Over 4,000 companies will soon need to comply. At the public workshop yesterday, the California Air Resources Board (CARB) provided much-needed clarity on which companies are covered, what is required, how to comply, and when compliance begins. Climate risk reporting is due on January 1st, 2026 - just four months away.  Scope 1 and 2 emissions reporting is expected by June 30, 2026, giving companies an extra six months to prepare. We’ve distilled the three-hour workshop into five key things companies must know to prepare for compliance. 

After months of anticipation from the corporations mandated to disclose through California’s Climate Corporate Data Accountability Act (SB 253) and Climate-Related Financial Risk Act (SB 261), as well as the investors and consumers of this information, we have to get comfortable operating strategically in a dynamic landscape. In this ESG Today article I summarize the current status of the laws, following CARB's May public workshop. The takeaway is clear: deadlines are firm, reporting requirements are coming, and companies must prepare now. 🗓️The Clock is Ticking: Despite ongoing development of prescriptive reporting rules expected by year-end, core reporting requirements begin in 2026 for FY2025 data. Companies should already be deep in the stakeholder collaboration, data collection, and analysis required to meet reporting requirements. ✅"Good Faith Effort" Requires Concrete Action: While CARB is not enforcing compliance penalties for SB 253 in 2026, this allowance is only for companies that demonstrate good faith efforts to meet reporting requirements.  This means scope 1 & 2 emissions inventories must obtain limited assurance. 📈Beyond Compliance, It's Strategic Imperative: This isn't just about ticking boxes.  Market demand for climate disclosure is high, with investors increasingly incorporating climate considerations into their risk assessments and capital allocation decisions. Similar business advantages exist for companies to de-risk and decarbonize supply chains.  So what should companies do over the next 6 months ahead of reporting deadlines? Make "No-Regret" Decisions Today: The smartest move is to focus on foundational work that aligns with current requirements and global best practices. This includes: 📊Building audit-ready, GHG Protocol-aligned emissions inventories  🔐Preparing for assurance from day one with transparent documentation  💻Investing in robust data systems that can adapt ⚖️Incorporate climate into core governance, risk and resilience infrastructure The market is already demanding this level of transparency. California isn't backing down, and organizations that lead with proactive preparation will be the ones to thrive in this dynamic landscape. What proactive steps has your organization taken to navigate these non-negotiable deadlines? Let me know in the comments! 👇 https://lnkd.in/ekGhT_kq Workiva #climatedisclosure #climaterisk #GHGemissions

⚖️ 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐑𝐞𝐚𝐝𝐢𝐧𝐞𝐬𝐬: 𝐖𝐡𝐚𝐭 𝐭𝐨 𝐊𝐧𝐨𝐰 𝐁𝐞𝐟𝐨𝐫𝐞 𝐘𝐨𝐮 𝐏𝐫𝐞𝐩𝐚𝐫𝐞 𝐘𝐨𝐮𝐫 𝐂𝐥𝐢𝐦𝐚𝐭𝐞 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞𝐬 The regulatory world of climate and sustainability reporting is evolving fast — and for ESG professionals, keeping up can feel like chasing a moving target. 📌 From Europe’s Omnibus Simplification Package to uncertainty around California’s SB 253 & SB 261, companies often find themselves stuck between preparing in advance and waiting for clarity. With mandatory reporting for thousands of companies beginning in 2026, the time to start preparing is now. At the same time, global momentum is building: 🌍 ISSB Climate Standard (since 2024) → a global baseline for consistent disclosures. EU’s ESRS → part of CSRD, already setting strict expectations. UK → new consultation in progress. 🌏 Hong Kong, Canada, Brazil → following closely with their own disclosure regimes. 🔎 What Do Climate Disclosure Rules Actually Require? - Most regulations are built on the 11 recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which has shaped climate reporting since 2015. The four core pillars are: 1️⃣ Governance – How leadership oversees climate issues. 2️⃣ Strategy – How climate change affects the business now and in the future. 3️⃣ Risk Management – How risks & opportunities are identified and addressed. 4️⃣ Metrics & Targets – How performance is tracked and reported. ✅ These pillars have now been woven into ISSB, CSRD/ESRS, and other frameworks, creating greater global alignment and helping companies avoid “alphabet soup” fatigue. 💡 What This Means for Companies - The good news: you don’t need to start from scratch. - Many peers and industries have already been reporting against TCFD-aligned disclosures for years. - There’s a wealth of publicly available best practices to learn from. Regulatory convergence = less duplication, more interoperability. 📌 Takeaway: 2026 might feel far away, but building regulatory readiness takes time. Companies that start now will have a smoother path — turning compliance into an opportunity for stronger governance, resilience, and investor trust. 𝐄𝐦𝐚𝐢𝐥: sachin.sharma@sgs.com or 𝐌𝐞𝐬𝐬𝐚𝐠𝐞: Sachin Sharma 𝐁𝐨𝐨𝐤 𝐚 F̳R̳E̳E̳ 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐢𝐨𝐧 𝐜𝐚𝐥𝐥: https://lnkd.in/g23UVEMb #ClimateDisclosure #RegulatoryReadiness #ESGCompliance #ISSB #CSRD #ESRS #TCFD #SB253 #SB261 #ClimateReporting #SustainabilityRegulation #SustainableFinance #Governance #RiskManagement #ClimateStrategy #MetricsAndTargets #SustainabilityLeadership #CorporateTransparency #ESGStrategy #FutureOfReporting