Key Topics
- CARB Proposes Updated Timeline to Publish Final Regulations Covering SB 253 and SB 261
- Net-Zero Banking Alliance Disbands
- European Parliament Rejects Simplified CSDR Package
The Details
The California Air Resources Board (CARB) recently added a notice to its webpage indicating that it will further delay the issuance final regulations for California’s climate-related reporting statutes (Senate Bills 253 and 261), likely until the first quarter of 2026.
- The agency attributed the delay to “the large volume of public comments staff have received, and ... ongoing input related to identifying the range of covered entities.” A preliminary list of entities was published September 24, although CARB underscored that entities are responsible for evaluating whether they are subject to reporting obligations under SB 253 and SB 261, irrespective of whether an entity appears (or does not appear) on that list. CARB is accepting feedback on the list through an online survey.
- We do not anticipate that this delay will cause changes to current compliance deadlines. Companies operating in California with annual revenues above $500 million must submit climate-related risk reports by January 1, 2026. Entities with revenues exceeding $1 billion must disclose Scope 1 and 2 greenhouse gas emissions by June 30, 2026, based on CARB guidance to date. We have written extensively regarding these statutes.
- CARB is also continuing to take pubic feedback in relation to its draft reporting template for Scope 1 and Scope 2 GHG emissions through October 27.
Recent reporting confirms the Net-Zero Banking Alliance (NZBA) has ceased operations following a series of high-profile departures from the group without the membership base to sustain its activities.
- The Alliance was a United Nations-backed coalition launched in 2021 to align banks’ financing activities with global net zero goals.
- A spokesperson for the group said the decision to disband came after an exodus of members since late 2024. NZBA’s members voted to transition NZBA from a member-based alliance into a “framework initiative” offering guidance for banks on climate target setting (e.g., decarbonization goals), transition finance and transition planning for climate migration.
- The closure is a continuation of the broader challenges faced by the financial sector climate alliances. For instance, the Net Zero Asset Managers, another United Nations-backed group ceased operations earlier this year; however, the group recently announced that it intends to resume target and implementation support activities in early 2026, albeit without requiring signatories to invest in line with achieving “net zero” by 2050.
The European Parliament rejected a vote on Wednesday, October 22, to simplify rules for the Corporate Sustainability Reporting Directive (CSRD) under the proposed Omnibus I package, with final count at 309 votes in favor, 318 against and 34 abstentions.
- The vote comes on the heels of a contrasting October 13 vote by Parliament’s Legal Affairs Committee to adopt the decision, representing the current fissures within Parliament in its attempt to find common ground on the sustainability package.
- Supporters of the compromise (the center-right Christian democrats and the liberals), argued it would have reduced administrative burdens on smaller companies struggling to comply with complex ESG mandates. The opponents (far left and those split from the center-left social democrats), warned rolling back requirements could undermine the European Union’s (EU) climate goals and deprive investors of essential information to assess environmental and social risks.
- Members will vote on amendments to the file at the upcoming plenary session in Brussels on November 13, then plan to initiate talks with EU governments, which already adopted their position on June 23. Parliament aims to finalize the legislation by the end of 2025.
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