California Air Resources Board

We submit these comments on behalf of a confidential client in response to the California Air Resources Board’s (“CARB”) request for comment titled, “Information Solicitation to Inform Implementation of California Climate-Disclosure Legislation: Senate Bills 253 and 261, as amended by SB 219” (“Information Solicitation”). Per CARB’s request in the Information Solicitation, we have referenced the question numbers relevant to each of our responses.

Question 3:
Regulations to implement SB 253 and 261 (as applicable) should account for companies that already align their reporting with the European Sustainability Reporting Standards (“ESRS”) related to the European Corporate Sustainability Reporting Directive (“CSRD”). CARB could ensure that reporting “minimizes duplication of effort and allows a reporting entity to submit to the emissions reporting organization reports prepared to meet other national and international reporting requirements” by expressly confirming via regulation that reporting pursuant to the standards related to the CSRD will be considered compliant with the climate disclosure legislation. Cal. Health & Saf. Code § 38532(c)(1)(D)(i) (See question 3.b). Reporting entities should retain flexibility and not be required to “pick a specific reporting method and consistently use it year-to-year,” because there may be national or global events or circumstances that necessitate a decision to change reporting method. (See question 3.c).

Question 8:
Regulations to implement SB 253 (as applicable) should account for companies that already align their reporting with the ESRS related to the CSRD. CARB should promulgate regulations that ensure consistency with and mirror the flexibility permitted under the CSRD. Specifically, CARB should incorporate the term “limited assurance,” consistent with its definition and use in the CSRD. Further, as long as “assurance providers” meet the qualifications provided in section 38532(c)(1)(F)(iv) of the California Health and Safety Code, the regulations should not limit the types of providers available for use. For example, if a boutique consulting firm meets the qualifying criteria, there should be no limitation on a reporting company’s ability to use that firm for purposes of complying with SB 253 and 261.

Question 9:
Regulations to set reporting deadlines under SB 253 and 261 should align the reporting commitments that companies have already undertaken pursuant to the Carbon Disclosure Project and CSRD. Specifically, the regulations should include an option to report within 12 months of fiscal year end. This is particularly important for companies that operate on a fiscal year that does not align with the calendar year.

Question 13:
SB 261 requires that a covered entity disclose its climate-related financial risk in accordance with either “the recommended framework and disclosures contained in the Final Report of Recommendations of the Task Force on Climate-related Financial Disclosures (June 2017) published by the Task Force on Climate-related Financial Disclosures [“TCFD”], or any successor thereto, or pursuant to an equivalent reporting requirement. . . .” Cal. Health & Saf. Code § 38533(b)(1)(A)(i) (emphasis added). Regulations to implement SB 261 should affirm that, consistent with SB 261, companies already reporting in accordance with the guidance provided by the Final Report of Recommendations of the TCFD may continue to do so for purposes of risk reporting under SB 261.

Thank you for your consideration of these comments.