What Companies Need to Know About California’s AB 1305
California Governor Gavin Newsom signed the Voluntary Carbon Market Disclosures Act (AB 1305) into law on October 7, 2023, creating a novel disclosure requirement for entities that participate in the voluntary carbon offset market, or that make certain claims about their carbon dioxide or greenhouse gas (“GHG”) emissions. While California’s other brand-new climate reporting laws, […]
Leah Malone is a Partner, Emily Holland is a Counsel, and Chayla Sherrod is an Associate at Simpson Thacher & Bartlett LLP. This post is based on their Simpson Thacher memorandum.
California Governor Gavin Newsom signed the Voluntary Carbon Market Disclosures Act (AB 1305) into law on October 7, 2023, creating a novel disclosure requirement for entities that participate in the voluntary carbon offset market, or that make certain claims about their carbon dioxide or greenhouse gas (“GHG”) emissions. While California’s other brand-new climate reporting laws, SB 253 and SB 261 (discussed further here), have attracted a great deal of more attention (and involve more preparatory work), companies will need to determine if AB 1305 applies to them and prepare to make required disclosures by the end of the calendar year. [1]
No implementing regulations or official guidance [2] has been issued under AB 1305, and none is expected, although state legislators are expected to re-attempt “clean-up” legislation clarifying aspects of AB 1305 next year. If a company hasn’t assessed whether it needs to comply with AB 1305, it should immediately begin doing so. With near-term compliance deadlines in mind, we set out below the requirements of the statute, potential consequences of noncompliance, and best practices for covered entities.
