How executives handle climate disclosures

If you’re a CFO and still think climate regulation is just a compliance headache, I’d encourage you to read SB 253 and SB 261 a bit more closely. These two bills won’t just require you to report climate data. They’ll expose how prepared (or not) your company is to handle climate risk — financially, reputationally, and operationally. That has implications for capital markets. Investor relations. Insurance premiums. And future access to public and private funding. Let me make it tangible: → SB 253 will force companies doing business in California to disclose full Scope 1, 2 and 3 emissions. That means mapping your upstream and downstream value chain. Not estimating. Not modeling. Disclosing. → SB 261 demands public disclosure of climate-related financial risks and how your company plans to manage them. Think TCFD-style reporting — but public and enforced. And yet, many companies are still thinking in terms of ESG checklists and one-off materiality assessments. That’s not going to cut it anymore. What’s coming isn’t “more compliance.” It’s a shift in how financial performance and sustainability are tied together. Regulators are accelerating that shift. If I were in your seat, I’d ask two simple questions: Do we have a clear line of sight from raw supply chain data to our financial disclosures? Can we actually prove what we’re reporting? If the answer is no — that’s not a reporting problem. It’s a business readiness problem. The good news? There’s still time to move. But in Q3 and Q4, as budget conversations start ramping up, the cost of not preparing will start to show up on the balance sheet. Because climate risk is now business risk. And this time, it’s not just your CSO’s responsibility to solve it.

#𝗘𝗦𝗚𝗶𝗻𝗧𝗵𝗿𝗲𝗲: 𝗧𝗵𝗲 𝗦𝗘𝗖 𝗖𝗹𝗶𝗺𝗮𝘁𝗲 𝗥𝘂𝗹𝗲 𝗦𝘁𝗮𝘆 – 𝗻𝗼𝘄 𝘄𝗵𝗮𝘁? On April 4, 2024, the SEC voluntarily stayed the effectiveness of the Climate Disclosure Rule, stating it “will continue vigorously defending the [climate rule’s] validity in court”, but issued the stay to “facilitate the orderly judicial resolution of” challenges presented against the climate rule & avoid “potential regulatory uncertainty if registrants were to become subject to the [climate rule’s] requirements” before the legal challenges were settled. However, this stay 𝙙𝙤𝙚𝙨 𝙣𝙤𝙩 𝙧𝙚𝙫𝙚𝙧𝙨𝙚 𝙤𝙧 𝙘𝙝𝙖𝙣𝙜𝙚 𝙖𝙣𝙮 𝙤𝙛 𝙩𝙝𝙚 𝙧𝙚𝙦𝙪𝙞𝙧𝙚𝙢𝙚𝙣𝙩𝙨 𝙞𝙣 𝙩𝙝𝙚 𝙘𝙡𝙞𝙢𝙖𝙩𝙚 𝙧𝙪𝙡𝙚 𝙤𝙧 𝙞𝙢𝙥𝙖𝙘𝙩 𝙞𝙣 𝙖𝙣𝙮𝙬𝙖𝙮 𝙩𝙝𝙚 𝙎𝙀𝘾’𝙨 𝙚𝙭𝙞𝙨𝙩𝙞𝙣𝙜 2010 𝙞𝙣𝙩𝙚𝙧𝙥𝙧𝙚𝙩𝙞𝙫𝙚 𝙧𝙚𝙡𝙚𝙖𝙨𝙚 𝙤𝙣 𝙘𝙡𝙞𝙢𝙖𝙩𝙚-𝙘𝙝𝙖𝙣𝙜𝙚 𝙙𝙞𝙨𝙘𝙡𝙤𝙨𝙪𝙧𝙚𝙨. So what now for US publicly listed companies? 1. The focus of the stay is on the SEC’s Climate Disclosure Rule, not 𝗺𝗮𝘁𝗲𝗿𝗶𝗮𝗹 𝗰𝗹𝗶𝗺𝗮𝘁𝗲 𝗿𝗶𝘀𝗸 𝗱𝗶𝘀𝗰𝗹𝗼𝘀𝘂𝗿𝗲 – 𝘁𝗵𝗶𝘀 𝗶𝘀 𝘀𝘁𝗶𝗹𝗹 𝗿𝗲𝗾𝘂𝗶𝗿𝗲𝗱. 2. 𝗧𝗵𝗲 𝘀𝘁𝗮𝘆 𝗱𝗼𝗲𝘀 𝗻𝗼𝘁 𝗺𝗲𝗮𝗻 '𝗽𝗲𝗻𝗰𝗶𝗹𝘀 𝗱𝗼𝘄𝗻’, most SEC registrants are subject to climate-related disclosure req under #CSRD & the California climate legislation, both of which will apply in 2025 for many. CSRD is more extensive than the SEC climate rule, requiring assurance over all disclosures rather than only GHG emissions, from the 1st year of reporting. If the SEC climate rule is delayed, many registrants will make CSRD or CA disclosures before providing comparable disclosures in their SEC filings. Additionally, many orgs continue to provide voluntary disclosures (e.g., CDP, TCFD/ISSB) that will be subject to significantly increased scrutiny, & should increase attention to data, governance, processes, & controls over that information given potential future inclusion in an SEC filing. 3. Some ‘𝗻𝗼 𝗿𝗲𝗴𝗿𝗲𝘁𝘀’ moves & questions that boards & mgmt teams can continue to prioritize, through a risk protection lens, now & that I shared on the #ElectricLadies Podcast (https://lnkd.in/gpniqXGV) w/ Joan Michelson (prior to the SEC stay) include: o How well do we understand the financial materiality of climate related risks & existing voluntary climate-related disclosure? o Do we understand how our existing publicly stated (or internal) climate-related targets & goals could trigger disclosure req. under the final SEC climate rule? o Have we engaged our auditor to understand how they will evaluate preparedness for SEC climate disclosures as well as other requirements? Take time now to stress test current climate governance systems. The risk of inaction is not w/o consequences & acting now to deepen understanding of preparedness for disclosure req. can surface opps to get ahead of competitors by strengthening trust with investors & other stakeholders. #deloitteesgnow

With California Rule SB261 requiring climate-related financial risk disclosures by Jan 1, 2026, many companies are revisiting their #TCFD reports. But compliance is just the beginning. Based on market observations, KPMG US has identified ways to unlock more value from climate risk assessments. For example: ✅ Strengthen the business case for decarbonization ✅ Integrate climate risk into ERM programs ✅ Align one assessment with multiple regulations (ISSB, CSRD, CDP) The opportunity? Go beyond disclosure to drive strategic, operational, and financial impact. Climate risk isn’t just a reporting exercise, it’s a lens for smarter decision-making. How is your organization approaching climate risk assessments? I’d love to hear your insights in the comments below. You can read more about all five of these strategies in our blog post here: https://lnkd.in/e6SksAfG #KPMGSustainability #KPMG #EnvironmentalResilience #SustainabilityStrategy #CaliforniaRule261 #ESG #Decarbonization

California climate disclosure law isn’t the outlier. It’s the preview. A lot of companies are looking at SB 253 and 261 as isolated state laws. They're not. They’re a signal of where regulatory frameworks globally are heading—faster than many expect. CSRD in Europe, mandatory disclosures in the UK, Singapore, Canada. Same themes. Same direction. And they all converge on one message: You need to understand, validate, and explain your emissions data—financially, operationally, and strategically. This isn’t a sustainability issue. It’s a systems issue. If you're a global company, you'll be required to align your emissions data, risk models, and strategic plans across dozens of jurisdictions. That requires infrastructure - not spreadsheets. And it requires internal coordination. Legal. Finance. Ops. Procurement. Sustainability. Audit. If even one link is weak, the whole disclosure risks falling apart. But what does “readiness” actually mean? It means leadership alignment on what data matters. It means traceability of every single figure. It means designing governance around your data - not just your report. Because compliance isn’t about filling out a form. It’s about proving control. And in this new era, those who can prove it - will lead. #climate #sustainability #carb #californiasb253 #californiasb261