In a significant move toward increased corporate transparency, California Governor Gavin Newsom recently signed a landmark climate disclosure bill into law. The new regulation, which takes effect in 2026, mandates that large companies doing business in California report their greenhouse gas (GHG) emissions, including Scope 1, Scope 2, and, for some, Scope 3 emissions. The legislation is part of California’s broader effort to address climate change and promote sustainability across various industries.
What the Climate Disclosure Law Means for Companies
Under the new law, companies generating more than $1 billion in revenue will be required to publicly disclose their GHG emissions annually. The rule applies not only to California-based businesses but also to any company with operations in the state, making its reach vast and impactful.
The reporting requirements cover three types of emissions:
- Scope 1: Direct emissions from owned or controlled sources, such as fuel combustion in company vehicles or facilities.
- Scope 2: Indirect emissions from purchased electricity, steam, heating, and cooling.
- Scope 3: Indirect emissions in a company’s value chain, including supply chain activities, product use, and waste management.
While the bill is primarily designed to increase corporate accountability and contribute to California’s climate goals, it poses significant compliance challenges for companies that are unprepared. Scope 3 emissions involve complex data collection and calculations that may require extensive collaboration across the supply chain.
How Vervantis Can Help with Climate Reporting
For businesses navigating the complexities of the new law, preparation is key. While Vervantis specializes in helping companies manage their Scope 1 and Scope 2 emissions, we offer comprehensive services to streamline your reporting process and ensure compliance with California’s new requirements.
Here’s how Vervantis can assist:
- Scope 1 and Scope 2 Emission Management: Vervantis provides tailored solutions to help companies accurately measure, manage, and reduce their direct and indirect emissions. Whether it’s data collection, energy usage tracking, or emissions reporting, our tools ensure you meet the necessary requirements with minimal disruption to your operations.
- Energy Procurement and Efficiency Strategies: Our expertise in energy procurement and utility management can help you reduce Scope 2 emissions by optimizing your energy use. We assist in sourcing renewable energy and improving energy efficiency through strategic investments, such as upgrading lighting systems and implementing smart energy controls.
- Technology and Data Solutions: Vervantis leverages cutting-edge software to simplify the emissions tracking process. Our platforms can automate much of the reporting work, ensuring you have real-time visibility into your Scope 1 and 2 emissions data, making compliance more manageable.
- Guidance and Consultation: Navigating new regulations can be overwhelming, but our team of experts is here to guide you. We offer ongoing support and strategic advice to ensure your company remains compliant with state regulations while staying on track with your sustainability goals.
Looking Ahead
As the 2026 deadline approaches, companies that proactively address their climate disclosure obligations will be better positioned to manage risks and capitalize on opportunities. While the task of reporting emissions may seem daunting, tools and partners like Vervantis can ease the burden by providing the expertise and resources necessary to comply with California’s forward-thinking legislation.
By prioritizing energy management and reducing Scope 1 and 2 emissions, businesses not only avoid potential penalties but also contribute to the global push for sustainability. Vervantis is ready to help your company succeed in this new regulatory environment, fostering transparency and sustainability for a greener future.
