How Climate Laws Affect Corporate Accountability

How transparent should companies be about their climate impact in the US? Imagine: You’re an investor trying to assess a company’s future. You ask yourself, Are they prepared for the risks of climate change? How do their operations affect the environment, and are they doing anything? Now Imagine you don’t have clear answers because the data is inconsistent or missing. This is the reality many investors have faced for years, but big changes are on the horizon in the U.S. In March 2024, The U.S. Securities and Exchange Commission (SEC) adopted new climate disclosure rules that could reshape how companies communicate their climate risks and actions. These rules aligned with global standards like the Task Force on Climate-Related Financial Disclosures (TCFD) and the Greenhouse Gas Protocol require public companies to report on: -How climate risks affect their strategy and operations. -Greenhouse gas emissions (Scope 1 and Scope 2 for large filers, Scope 3 if material). -Board and management oversight of climate-related risks. -Financial impacts of severe weather and carbon offsets. If implemented, these rules might take effect as early as January 2025. But they’re not without challenges legal battles could shift timelines or outcomes. Meanwhile, California is setting its own pace with new laws, SB 253 and SB 261, targeting large corporations. These laws go even further: -Companies earning over $1 billion must disclose emissions across all three scopes by 2026. -Companies earning over $500 million must publish biennial reports on how climate risks affect their finances and supply chains. Here’s the thing: Scope 3 emissions are notoriously difficult to measure. Yet, they often make up the largest share of a company’s carbon footprint. So, Why does this matter? From my perspective, These regulations aren’t just about compliance. They’re about accountability. They demand that companies be honest and transparent about their environmental impact. And that’s something investors, employees, and consumers increasingly care about. According to a recent survey, 85% of investors consider ESG factors in their decisions. I believe this is where leadership matters most. Leaders who embrace these changes signal that their companies are not just surviving today but preparing for tomorrow. What do you think about these new regulations? Will they push companies to do better or overwhelm them with compliance?

𝗪𝗶𝗹𝗹 𝗦𝗰𝗼𝗽𝗲 𝟯 𝗘𝗺𝗶𝘀𝘀𝗶𝗼𝗻𝘀 𝗥𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴 𝗥𝗲𝗮𝗹𝗹𝘆 𝗗𝗶𝘀𝗮𝗽𝗽𝗲𝗮𝗿? With political shifts and changing regulations, many are wondering if Scope 3 emissions reporting is on its way out. But is it really, or is this just a period of retooling that will clarify where it ultimately lands rather than eliminating it altogether? 👉 𝗦𝘁𝗮𝘁𝗲 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻𝘀 𝗿𝗲𝗺𝗮𝗶𝗻 𝗶𝗻 𝗳𝗼𝗿𝗰𝗲. 𝗖𝗮𝗹𝗶𝗳𝗼𝗿𝗻𝗶𝗮’𝘀 𝗖𝗹𝗶𝗺𝗮𝘁𝗲 𝗖𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗗𝗮𝘁𝗮 𝗔𝗰𝗰𝗼𝘂𝗻𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗔𝗰𝘁 (𝗖𝗖𝗗𝗔𝗔) 𝗿𝗲𝗾𝘂𝗶𝗿𝗲𝘀 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝘄𝗶𝘁𝗵 𝗼𝘃𝗲𝗿 $𝟭 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 𝗶𝗻 𝗿𝗲𝘃𝗲𝗻𝘂𝗲 𝘁𝗼 𝗿𝗲𝗽𝗼𝗿𝘁 𝗦𝗰𝗼𝗽𝗲 𝟭, 𝟮, 𝗮𝗻𝗱 𝟯 𝗲𝗺𝗶𝘀𝘀𝗶𝗼𝗻𝘀, 𝘀𝘁𝗮𝗿𝘁𝗶𝗻𝗴 𝗶𝗻 𝟮𝟬𝟮𝟲 𝗳𝗼𝗿 𝗱𝗶𝗿𝗲𝗰𝘁 𝗲𝗺𝗶𝘀𝘀𝗶𝗼𝗻𝘀 𝗮𝗻𝗱 𝟮𝟬𝟮𝟳 𝗳𝗼𝗿 𝗦𝗰𝗼𝗽𝗲 𝟯. 𝗧𝗵𝗶𝘀 𝗲𝗻𝘀𝘂𝗿𝗲𝘀 𝗰𝗼𝗻𝘁𝗶𝗻𝘂𝗲𝗱 𝗲𝗺𝗶𝘀𝘀𝗶𝗼𝗻𝘀 𝗱𝗶𝘀𝗰𝗹𝗼𝘀𝘂𝗿𝗲 𝗿𝗲𝗾𝘂𝗶𝗿𝗲𝗺𝗲𝗻𝘁𝘀 𝗮𝘁 𝘁𝗵𝗲 𝘀𝘁𝗮𝘁𝗲 𝗹𝗲𝘃𝗲𝗹 𝗦𝗼𝘂𝗿𝗰𝗲: https://lnkd.in/eF3iUYme International requirements drive compliance. The EU Corporate Sustainability Reporting Directive (CSRD) mandates that large companies operating in the EU disclose Scope 3 emissions. This applies to many U.S. companies doing business in Europe, reinforcing the need for emissions transparency beyond U.S. federal policies. 𝗦𝗼𝘂𝗿𝗰𝗲: https://lnkd.in/etWZEbjm Investor demand for transparency isn’t slowing down. Asset managers overseeing €6.6 trillion have urged the EU to maintain stringent sustainability disclosure rules, emphasizing the need for reliable Scope 3 emissions data to guide investment decisions. 𝗦𝗼𝘂𝗿𝗰𝗲: https://lnkd.in/ex4eJuTb Market forces continue to push for accountability. Companies with global supply chains and sustainability commitments will still face pressure from investors, customers, and supply chain partners to track and disclose Scope 3 emissions, regardless of U.S. federal policy shifts. The question isn’t whether Scope 3 is going away. The real question is where it will ultimately settle as regulatory clarity unfolds. 𝗪𝗵𝗮𝘁 𝗱𝗼 𝘆𝗼𝘂 𝘁𝗵𝗶𝗻𝗸? 𝗜𝘀 𝘁𝗵𝗶𝘀 𝗮 𝗿𝗲𝘀𝗲𝘁, 𝗮 𝗿𝗲𝘁𝗼𝗼𝗹𝗶𝗻𝗴, 𝗼𝗿 𝘀𝗼𝗺𝗲𝘁𝗵𝗶𝗻𝗴 𝗲𝗹𝘀𝗲 𝗲𝗻𝘁𝗶𝗿𝗲𝗹𝘆? * * * * * * * * * * 𝗗𝗼𝗻'𝘁 𝗷𝘂𝘀𝘁 𝘂𝘀𝗲 𝗯𝗲𝘁𝘁𝗲𝗿 𝗲𝗻𝗲𝗿𝗴𝘆, 𝘂𝘀𝗲 𝗲𝗻𝗲𝗿𝗴𝘆 𝗯𝗲𝘁𝘁𝗲𝗿!™ For energy insights, follow: #EnergyNinjaChronicles ⚡ Subscribe to the newsletter: 📩 https://lnkd.in/dGpq2-dC #Scope3Emissions #SustainabilityReporting #EnergyRegulations #CorporateTransparency #ESGCompliance