FIGURE 2 SB-253 – Climate Corporate Data Accountability Act


This new California law mandates that public and private U.S. businesses with revenues over $1 billion that operate in California measure and report their Scope 1, 2, and 3 greenhouse gas emissions in conformance with the Greenhouse Gas Protocol (www.ghgprotocol.org) standards and guidance.


Scope 1 emissions result from direct emissions from company-owned operations. Scope 2 emissions are indirect emissions from purchasing electricity, steam, heating, and cooling emissions. Scope 3 emissions are material and encompass all indirect upstream and downstream emissions produced from a company’s supply chain.


The law requires reporting entities to obtain an assurance engagement, performed by an independent third-party assurance provider, approved by the state board of California, with expertise in greenhouse gas emissions accounting.


Scopes 1 and 2 emissions are limited assurance beginning in 2026. 2026


Scopes 1 and 2 emissions beginning in 2026 (reporting 2025 data).


2027


Scope 3 emissions beginning in 2027 (reporting 2026 data).


SOURCE: SB-253 Bill Text, SEC. 2. Section 38532 (C) (1) Scope 3 emissions are limited assurance beginning in 2030. 2030


The California state board may not issue penalties for any errors in filing and can only issue penalties for failure to file beginning in 2030.


2033


The California state board may not issue penalties for any errors in filing and can only issue penalties for failure to file beginning in 2030.


communications strategy, including tailored climate briefings and open responses to climate-related inquiries and matters.


Improving Transparency in Climate Disclosures Te new California regulations and the SEC proposed regulation compel IR professionals to collaborate closely with cross-functional teams in the business, spanning sustainability, accounting, finance, and legal functions. Tis collaboration is imperative for: • Assessing Climate Impact: IR professionals must identify climate-related risks and opportunities that hold relevance for the company. Tis entails a comprehensive assessment of how climate factors affect financial outcomes and strategic decisions.


• Building Robust Controls: Te development of robust reporting processes and procedures becomes a priority. IR professionals must work alongside internal stakeholders to ensure data accuracy and integrity.


• Assurance: To enhance investor confidence, IR professionals may consider collaborating with internal audit committees and external audit firms to verify and ensure the integrity of the disclosed data.


Redefining Investor Engagement Te climate disclosure regulations are not mere compliance tasks; they serve as drivers for a more extensive transformation in how compa- nies engage with their investors. IR professionals should anticipate:


niri.org/ irupdate


• Integration of Climate Considerations: IR professionals will need to develop strategies that effectively tackle climate-related matters. Highlighting climate-related initiatives, targets, and progress in achieving sustainability goals can help demonstrate a company’s commitment to addressing climate risks. • Climate-Related Narratives: IR professionals must be able to craft a clear and compelling narrative around climate-related risks and opportunities, which can help strengthen investor confidence and set the company apart in the eyes of ESG- focused investors. Te evolving climate disclosure regulations are reshaping


the role of investor relations teams. Beyond mere compliance, IROs must anticipate and respond to shifting investor expecta- tions, enhance disclosure practices, and adapt their overarching IR strategy. By embracing these changes proactively, IR professionals can not only meet regulatory requirements but also enhance their company’s reputation and attractiveness to a new generation of climate-conscious investors. IR


Kristina Wyatt is Deputy General Counsel & Chief Sustainability Officer at Persefoni; Mike Wallace is Chief Decarbonization Officer at Persefoni; and Eliana Cameira is Manager, Content Marketing at Persefoni; kristina.wyatt@persefoni.com, mike.wallace@persefoni. com, eliana.cameira@persefoni.com.


IR UPDAT E ■ FA L L 2 0 2 3 2 3


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36