48. California Becomes the First State to Adopt Climate Disclosure Legislation
One project in a seventeen-project portfolio totaling 480 kW at Paradise Valley Estates in Fairfield, CA.
On October 7th, California Governor Gavin Newsom signed two landmark climate disclosure bills into law.
The first disclosure bill, SB 253, requires businesses operating in California with over $1 billion in revenue to publicly disclose their greenhouse gas emissions, and the other, SB 621, requires the more than 10,000 companies in the state making over $500 million a year in revenue to report their climate-related financial risks.
These bills share similarities with last year’s disclosure rules proposed by the U.S. Securities and Exchange Commission (SEC), though go much further in their requirements. SB 253 universally requires Scope 3 disclosure, as contrasted with the SEC’s proposal, which would only require this disclosure for companies with a stated emissions goal that includes Scope 3 emissions. These California bills also require disclosure from both private and public companies, while the SEC’s would only apply to public companies. These bills come after Ceres’ recent Climate Risk Scorecard, which found that federal agencies have made significant progress in mitigating climate-related risks to capital markets and institutions, but also still have a long way to go. Read more about the 2023 Scorecard here.
California has been a leader when it comes to climate reporting requirements, but many other states and the U.S. federal government have begun exploring these types of rules as well. For California community banks, there couldn’t be a better time to partner with Sunwealth, who can assist institutions in preparing for state reporting laws while simultaneously enhancing portfolio stability and resilience. Additionally, partnering with Sunwealth offers exposure to projects that could provide a high risk-adjusted after-tax IRR and CRA credits. Irrespective of whether other states adopt climate disclosure requirements, investing in solar tax equity with Sunwealth remains an appealing opportunity for banks across the country that are looking to build community wealth, sustainability, and resilience.
Reach out to learn more about partnering with Sunwealth.