We have a new entrant into the state-level GHG Reporting world, 6 NYCRR Part 253 (Mandatory GHG Reporting) is here!

If you have large sources of scope 1 emissions in NY, sell fuel/electricity into NY, supply large amounts of agricultural lime and fertilizer in NY, or run waste large operations/export in NY, annual GHG reporting is no longer “nice to have” — it’s a regulated filing.

The data gathered from this regulation will greatly inform how NY’s carbon market could play out with a potential Cap-and-Invest type policy.

Why New York’s Mandatory GHG Reporting Feels Familiar:

• It is like the federal EPA GHGRP (40 CFR Part 98) and California’s Mandatory Reporting Regulation (MRR). The regulations include requirements for defined methods, documentation, QA/QC, and deadlines.
• Similar to the California requirements, NY requires third-party verification for “Large Emission Sources”.
• The NY regulations calculates CO₂e using a 20-year global warming potential (vs the typical 100-year GWP) — which puts a brighter spotlight on near-term climate pollutants (especially methane).

If You’re a Large Emission Source, Expect a Real, Reasonable Level Audit Cycle, Not a Light Review.

• Verification is required annually once you cross the “Large” thresholds (e.g., facilities ≥25,000 MT CO₂e/year; plus supplier-specific thresholds).
• Timeline: emissions year 2026 is the first reporting year; first Emissions Data Report is due June 1, 2027.
  • First Verification Statements are due Dec 1, 2027 (for 2026) and Dec 1, 2028 (for 2027), then Aug 10 in later years.
• How to get it done: you’ll need to contract with a DEC-accredited verification body (DEC is currently developing the website with the full list of verification bodies). The first year is a “full verification” (expect a site visit + deeper systems/data checks), with the next two years potentially less intensive if you earn a clean statement.

The practical takeaway is that 2026 is not a “dry run” year.  It will be important to follow your established monitoring plan, initiate QA/QC procedures, iterate and improve processes, and start assembling an evidence package in preparation for verification. Note that certain reporters such as High-Emitting Solid Waste Landfills, Anaerobic Digester and Liquid Storage Operators will need to submit an Emissions Monitoring and Measurement Plan by September 1, 2026.

Across jurisdictions, markets, and institutions, sustainability expectations shifted while the work was already underway. Regulatory timelines stretched, collapsed, or overlapped. Political rhetoric sharpened even as investor and insurer expectations largely held. Technology advanced faster than most organizations could comfortably absorb. Very little stopped. But it became much harder to pace, prioritize, and describe with certainty.

This article sits inside that tension. It brings together what we saw across client work and the judgment calls behind it, and includes personal reflections from members of our sustainability team on what 2025 felt like from within the work. We also look ahead, because many of the patterns that defined 2025 are likely to shape how sustainability work evolves in 2026.

Rather than treating 2025 as a tidy timeline or a set of definitive answers, we trace the forces that shaped day-to-day decision-making within the organizations we worked with. Here are eight forces our team saw unfold over the past year.

1. Regulatory Uncertainty Increased, but the Work Did Not Disappear

ESG regulatory uncertainty increased in 2025. EU CSRD and CSDDD “simplification,” repeated delays to the EU Deforestation Regulation, the continued stay around the U.S. SEC climate disclosure rule, and uneven movement in California’s climate disclosure laws all reinforced the same lesson: plan anyway, but build flexibility as the compliance map keeps shifting.

Europe: “simplify + delay” without stepping away

In Europe, 2025 felt less like retreat and more like recalibration. The European Parliament approved an Omnibus amending directive in December 2025 that reshapes the scope and timing of sustainability reporting and due diligence requirements. The headline was “burden reduction,” but the lived reality for many companies remained the same: build systems that can hold up.

Meanwhile, the EU Deforestation Regulation was delayed again. The revised compliance dates (late 2026 for larger operators and mid-2027 for smaller ones) were primarily driven by implementation readiness rather than by a change in ambition. Additionally, CBAM quietly kept moving forward: the European Commission continues to frame 2023–2025 as the transitional phase, with the definitive regime starting in 2026. Even when public debate focused elsewhere, product-level emissions data work still crept into procurement, trade, and finance teams.

Taken together, these shifts led to a kind of planning whiplash. Many companies continued to build CSRD-level systems but focused more on getting the basics right and keeping things flexible rather than trying to optimize for any specific regulatory outcome.

United States: disclosure stalled, pressure persisted

In the U.S., the SEC climate rule stayed on hold. In March 2025, the SEC voted to stop defending the rule, and later the Eighth Circuit paused the related litigation, leaving the outcome largely dependent on what the SEC ultimately decides to do next.

In California, momentum was uneven but not gone. During a late-2025 CARB SB 253/SB 261 rulemaking workshop, a lawyer interjected to announce that the Ninth Circuit had issued an injunction, a moment that our team on the call quietly described as feeling somewhat Netflix-like in its timing. CARB remained focused and continued answering questions, signaling that implementation work was still moving forward despite the legal uncertainty.

CARB subsequently posted draft proposed rulemaking documents on December 9, 2025, for the implementation of SB 253 and SB 261, while noting the Ninth Circuit’s temporary injunction on SB 261 enforcement pending appeal. The practical impact was similar to what we had experienced with the CSRD delay.  Some organizations paused work, but the majority continued to develop inventory methods, governance structures, and data pipelines because customers, investors, lenders, and internal risk owners continued to request the underlying information.

United Kingdom: credibility and enforcement took center stage

In the UK, attention shifted from expanding disclosure to strengthening its foundations. The FCA set out proposals to bring ESG ratings providers under oversight, focusing on transparency, governance, and conflicts of interest. In parallel, the CMA’s consumer enforcement powers expanded in April 2025 under the Digital Markets, Competition and Consumers Act framework, raising the stakes for misleading environmental claims. That enforcement shift changed behavior. More teams became cautious about public claims, and more effort moved upstream into internal evidence, controls, and review processes.

Across regions, the message of 2025 was consistent, even if the signals were not: regulation did not get lighter. It got harder to read. The organizations that kept moving built flexible systems, documented assumptions, and focused on credibility over certainty.

2. Global Standards Consolidated Quietly, Even as Regulations Stayed Uneven

While timing and enforcement of regulations remained uncertain, the underlying content of sustainability requirements moved in a more consistent direction. More jurisdictions continued to adopt or align with the ISSB standards, and the IFRS Foundation continued to support the framework through ongoing stewardship and refinements.

In practice, that quiet consolidation mattered. Even where formal rules were delayed, stayed, or contested, many companies used ISSB and TCFD-style architecture as a lowest-regret foundation: a structure that could satisfy investors while remaining adaptable across jurisdictions. One caveat persisted. ISSB incorporated TCFD’s disclosure recommendations into IFRS S2, but TCFD continues to be referenced in regulation and practice because laws often cite frameworks long after standards evolve. California’s SB 261 is a clear example: its reporting expectation is built around TCFD (or a successor/equivalent standard), meaning many companies must operate across both legacy and emerging frameworks simultaneously.

3. COP30 Pushed Finance and Adaptation Closer to the Center

COP30 reinforced a shift that has been building for years: the focus moved away from announcing new pledges and toward implementation, finance, and delivery. One clear signal was the renewed emphasis on adaptation finance, with COP30 outcomes calling for efforts to at least triple adaptation finance by 2035 as part of the broader climate finance trajectory. The point was not that COP30 “solved” adaptation finance; it did not, but it did sharpen expectations around delivery and real-world outcomes.

That same shift has been evident in our work supporting California’s SB 261 climate-risk disclosure requirements. Much of our focus has been on building capacity and shared understanding with clients, helping them see how their existing processes, GHG inventories, and climate risk assessments can serve as tools for resilience and adaptation rather than just disclosure requirements. Internally, this has meant identifying risks and modeling climate scenarios at a level that aligns with clients’ climate maturity, from initial risk identification through more detailed scenario analysis to support operational planning, continuity, and long-term adaptation decisions.

4. Technology Narrowed to What Actually Works: Measurement, Energy, and Removals

In 2025, technology conversations became more focused and more consequential. A few years ago, much of this space felt exploratory. This year, it looked more like infrastructure decisions.

Digital MRV and traceability moved from optional to foundational

Digital measurement, reporting, and verification (MRV) systems, alongside traceability tools, became harder to treat as “nice-to-have.” Expectations for compliance-grade data are rising, and organizations increasingly need systems that can withstand audit-style scrutiny and multi-framework reporting. For us as consultants, this also changed the work: clients increasingly requested assistance with evaluating tools, integrating platforms, and determining what should be in-house versus outsourced. To advise well, we had to educate ourselves quickly across a crowded and uneven software landscape.

Carbon dioxide removal matured fast, but unevenly

Carbon dioxide removal followed a similarly uneven path. Corporate interest has been expanding, and the menu of pathways has become more real: biochar, BECCS (bioenergy paired with carbon capture and storage), other CCS-linked approaches, and enhanced weathering that accelerates natural mineralization. At the same time, debates around MRV, accounting treatment, and claims governance intensified, underscoring that the market is scaling faster than consensus about how to measure and communicate impact.

Internally, this led to deeper learning and research, particularly on biochar as a pathway (including how feedstock, pyrolysis conditions, and end-use affect permanence and co-benefits). We are careful here: this is not a claim about published “GSI biochar research,” but rather about the reality of what we needed to understand to advise credibly.

Energy constraints stopped being a background issue

Overlaying both trends was a broader energy reality check. Electrification ambitions collided with grid constraints and reliability concerns, while data center demand became a material planning variable in many regions. That combination pushed more pragmatic conversations about efficiency, flexibility, and clean firm power, and it pulled sustainability discussions closer to operations, facilities, and energy procurement teams.

5. Voluntary Carbon Markets: Integrity Became the Product

Voluntary carbon markets continued to shift away from volume toward credibility. The core question increasingly became: what does this credit represent, and what claim does it support?

Integrity initiatives continued to raise the bar. The Integrity Council’s Core Carbon Principles are explicitly designed to increase transparency and quality differentiation in the voluntary carbon market. In parallel, VCMI’s Claims Code of Practice continued to shape expectations for credible claims linked to real emissions reductions and transparent reporting.

This credibility shift is also evident in how standard-setting bodies are evolving. For example, the GHG Protocol launched public consultations in 2025 on revisions to its Scope 2 Guidance and consequential accounting methods for electricity-sector actions, reflecting the broader push toward tighter accounting rules and clearer claims discipline. In practice, the direction is consistent: participation now requires stronger governance, clearer claims frameworks, and greater tolerance for scrutiny than in prior years.

6. Business Opportunities that Accelerated in 2025

Looking at 2025 through a services and operating-model lens, one thing became clear. Uncertainty didn’t slow sustainability work down; it changed where time and investment were spent. As regulatory timelines blurred and companies became more careful about public positioning, demand shifted toward strengthening internal systems, governance, and decision-making. The areas that moved fastest were not tied to any single framework, but to building capabilities that enable organizations to operate credibly across a range of scenarios. Below are a few examples of how this played out in the organizations we worked with:

1. Regulatory readiness and adaptable reporting systems
   EU “simplification” did not reduce workload so much as change priorities and order in which companies mature their sustainability programs to comply. The companies that moved forward built modular systems, so data and controls could adapt as requirements evolve.
2. Assurance readiness and ESG data controls
   Companies are increasingly focused on maturing their internal systems so that boards and audit committees have clear policies to rely on, and ESG data have defined owners, controls, and documentation that can withstand scrutiny, especially when regulation is imminent or investor expectations remain high.
3. Supply chain data and product-level traceability
   Even with delays, CSRD, CBAM, deforestation, and due diligence requirements pushed sustainability work deeper into procurement, making supplier data, traceability, and engagement core operational needs rather than side tasks. Those pressures quickly flowed down the value chain, driving greater demands on suppliers and keeping tools such as EcoVadis and Assent relevant, alongside newer platforms focused on lower-tier supplier data and traceability.
4. Climate risk and resilience planning tied to capital decisions
   Climate risk continued to shift away from disclosure and toward capital planning, insurance, and business continuity, and client conversations increasingly centered on a practical what’s in it for me lens, translating climate risk into financial materiality at different levels of the organization. This shift helped ground sustainability in real business value and decision-making.
5. CDR procurement strategy and claims governance
   As removal options expanded, companies increasingly needed formal procurement rules: what qualifies, what evidence is required, what claims are permissible, and what contract guardrails protect credibility.

7. ESG Politicization Continued to Chill External Positioning

Companies became more conservative in branding and public claims, not necessarily because the work stopped, but because the risk of overstatement rose and because ESG politicization continued to chill external positioning. As greenwashing enforcement tightened, especially in the UK, more companies shifted from communications-first to evidence-first approaches. With ESG politicization, investor pressure became more fragmented across regions, such that global companies had to manage differing expectations across European and U.S. stakeholders.

In practice, this showed up in very real ways. For example, we supported clients’ policies and governance structures to focus on transparency and process rather than specific goals or commitments. Likewise, our work drilled down on tangible impacts and business continuity.

8. What “Won” in 2025: Operationalizing Sustainability

Across sectors, one pattern stood out. ESG shifted from storytelling to operating system design. The companies that made real progress were not those with the most polished narratives, but those investing in the mechanics of how sustainability is actually implemented within the business.

In practice, that meant building controls and data pipelines that could serve multiple frameworks without constant rework, treating transition planning as part of capital planning and enterprise risk management, and investing in supply-chain transparency where regulation and exposure made it unavoidable. Increasingly, these systems followed a familiar plan–do–check–act cycle, with clearer planning, implementation, review, and continuous improvement built in rather than treated as afterthoughts.

This shift also signals something broader. Sustainability as a business concept is maturing and moving steadily toward compliance and standardization. Far from slowing progress, such standardization often creates the stability and clarity needed for meaningful competition, innovation, and long-term value creation. In that sense, 2025 marked the year ESG began to behave less like a narrative and more like a system that must function under real-world pressures.

Closing: the Shift that Defined the Year

Looking back on 2025, the most meaningful shift was not driven by a single regulation, standard, or technology. It was a reframing that happened inside organizations themselves. As uncertainty increased and external signals became harder to interpret, attention shifted away from debating headlines and toward understanding how sustainability functions day-to-day.

In 2025, the companies making real progress stopped centering their efforts on what to say publicly and started asking harder, more consequential questions internally. How does this actually operate within the business? Who owns it? How does it hold up under scrutiny? How does it connect to capital, risk, and operations? Those questions reshaped priorities, slowed down some conversations, and deepened others.

That shift mattered. It pushed sustainability work out of slide decks and into systems. It grounded climate risk in financial materiality and business continuity. It reframed reporting as the output of governance and processes, rather than the starting point. And it made space for sustainability to be treated less as a special initiative and more as part of how organizations plan, invest, and adapt.

If 2025 taught us anything, it is that sustainability work is not linear. It advances through pauses, reversals, recalibration, and steady, often quiet progress. The move from voluntary action toward clearer expectations, standardization, and compliance is not a sign of failure or fatigue. It is a sign of maturity.

As we look toward 2026, the question is no longer whether sustainability will continue to matter. The question is how well organizations are prepared to run it as part of the business, even when the rules keep shifting. In that sense, the defining question of 2025 may also be the one that carries forward: not what do we say, but how does this actually work. That shift defined the year.

Check out photos from 2025 Conferences and Personal Reflections from the team below:

Becky Twohey’s Personal Reflection on 2025

Jannika Kremer’s Personal Reflection on 2025

Albert Lu’s Personal Reflection on 2025

Carmen Twitchell’s Personal Reflection on 2025

Lauren Besser’s Personal Reflection on 2025

Albert Chung’s Personal Reflection on 2025

Brady Koetting’s Personal Reflection on 2025

References:

[1] European Parliament, “Simplified sustainability reporting and due diligence rules for businesses” (Dec 16, 2025). European Parliament
[2] European Parliament, “Deforestation law: Parliament adopts changes to postpone and simplify measures” (Dec 17, 2025). European Parliament
[3] European Commission, “Carbon Border Adjustment Mechanism (CBAM): transitional phase 2023–2025; definitive regime from 2026.” Taxation and Customs Union
[4] U.S. SEC Press Release, “SEC Votes to End Defense of Climate Disclosure Rules” (Mar 27, 2025). SEC
[5] Reuters, “US appeals court hits pause on challenges to SEC climate rule” (Sep 12, 2025). Reuters
[6] California Air Resources Board, SB 253/SB 261 program page noting draft proposed rulemaking documents posted Dec 9, 2025. California Air Resources Board
[7] CARB Staff Report (ISOR) referencing Ninth Circuit temporary injunction on SB 261 enforcement (Nov 18, 2025). California Air Resources Board
[8] Financial Conduct Authority, “FCA sets out proposals to make ESG ratings transparent” (Dec 1, 2025). FCA
[9] DLA Piper, “CMA’s new consumer enforcement regime comes into force in April 2025” (Apr 7, 2025). DLA Piper
[10] IFRS Foundation, ISSB overview and ongoing standard support/maintenance. Taxation and Customs Union (Note: if you want, I can swap this for a more specific IFRS “jurisdictional adoption” page in a second pass.)
[11] PwC, SB 261 explanation referencing TCFD alignment and practical disclosure expectations. PwC
[12] PwC, SB 261 and TCFD relationship and “successor framework” concept. PwC
[13] Baker Tilly, SB 261 requiring disclosure in accordance with TCFD or equivalent and noting enforcement paused. Baker Tilly
[14] UNFCCC document calling for efforts to at least triple adaptation finance by 2035 (COP30 decision text). UNFCCC
[15] IISD, “COP 30 outcome: what it means and what’s next” summarizing adaptation finance emphasis and delivery issues. IISD
[16] McKinsey Sustainability, coverage on digital MRV/measurement systems and compliance-grade data trends (sector perspective). IEA (If you prefer only Big Four, I can replace this with a Deloitte/PwC equivalent.)
[17] IPCC AR6 (peer-reviewed assessment basis) for definitions and pathway categories: biochar, BECCS, enhanced weathering (CDR taxonomy). (Web citation not pulled in this pass; if you want it strictly linked, I’ll add the exact IPCC chapter reference with a stable URL.)
[18] VCMI Claims Code of Practice (April 2025, v3.0) for claims discipline and credible use expectations. VCMI
[19] IEA, “AI is set to drive surging electricity demand from data centres” (Apr 10, 2025). IEA
[20] ICVCM, “Core Carbon Principles” (quality threshold and integrity framing). ICVCM
[21] GHG Protocol, announcement of public consultations on Scope 2 Guidance updates (Oct 20, 2025). ghgprotocol.org

The Greenhouse Gas (GHG) Protocol is regarded as the “gold standard” for corporate carbon accounting. However, as energy markets and sustainability reporting evolve and climate targets tighten, the rules must adapt. A major overhaul is currently underway, led by four technical working groups established in September 2024. While most of the work is still in the early stages, there have been notable updates regarding proposed Scope 2 changes, specifically around RECs or other contractual instruments used to reduce disclosed emissions.

Here is a summary of what you need to know before the current public consultation closes on January 31, 2026.

Hourly Matching and Deliverability Requirements

Historically, companies could purchase unbundled Renewable Energy Certificates (RECs) or Energy Attribute Certificates (EACs) from any time in a reporting year to “offset” their consumption.   The proposed updates move toward hourly matching, requiring RECs to be issued and redeemed for the same hour the energy was actually consumed.

Furthermore, the Market Boundary Requirement is becoming stricter. Under the new rules, companies must purchase energy from generators that could “plausibly deliver” electricity to their specific location via a connected grid, rather than buying “green” attributes from a different region that could not deliver the electricity or an unrelated power market. For the location-based method, a new hierarchy will prioritize the most precise spatial and temporal data that is publicly available.

The combination of both hourly matching and market boundary requirements means that in the future, bundled RECs may be more prevalent in the future. While these contracts are typically much more expensive than unbundled options, they provide confidence that they will be eligible for the new standards’ eligibility.

Proposed Exemptions to Hourly Matching

To ensure the new reporting requirements are feasible for all organizations, the proposed Scope 2 updates include several exemptions and transitional measures, particularly concerning the shift to hourly matching. These proposals consider setting exemption thresholds for smaller organizations or those with annual electricity consumption below a specific, yet-to-be-defined limit. Furthermore, a “legacy clause” is being considered for existing contractual instruments and arrangements to allow for a smoother transition without penalizing prior investments. Other tools to support implementation include the use of “load profiles” which would allow companies to estimate hourly data from annual or monthly records, and a multi-year phased implementation schedule.

Other Market-Based Updates

The proposed revisions clarify rules for electricity not covered by specific contracts. For Standard Supply Service (SSS), where companies previously lacked an explicit cap, the new guidance requires that entities claim no more than their pro-rata share of these shared resources.

In addition, the definition of “residual mix” is being considered for update. The update would eliminate the practice of defaulting to a standard location-based average when residual mix emission factors are missing. Instead, reporters must use a fossil-only emission factor (e.g., gas, oil, or coal) to ensure non-renewable energy is accurately represented and to prevent the double-counting of green attributes.

What’s Next?

While these changes increase the data burden, requiring more granular fossil-based emission factors and hourly load profiles, they are designed to eliminate “greenwashing” and ensure that corporate claims reflect physical reality. Small and medium-sized enterprises (SMEs) and companies with low annual consumption may see certain exemptions to ease this transition, but the direction of travel is clear that greater precision and higher accountability for reporting entities are coming.

Ensure your voice is heard; the GHG Protocol is accepting public comments through the end of January 2026.

If you’ve been following California’s climate disclosure rules, you know the alphabet soup has given way to what’s now being called “the 200s” – Senate Bills 219, 253, and 261. Together, these three pieces of legislation are reshaping corporate climate reporting for thousands of companies “doing business” in California. Despite ongoing legal challenges, a federal court in California rejected business groups’ requests to block the laws, companies’ preparations should move forward based on the California Air Resources Board (CARB) guidance.

Earlier this month, CARB released its minimum disclosure checklist for SB 261. While the checklist is now closed for comments, it offers the clearest view yet into what companies will be expected to put on the record by 2026. Here’s a quick guide to the highlights and some of the grey areas.

Annual Fees

To fund administration, CARB has proposed annual fees:

• SB 253: $3,106 per covered entity
• SB 261: $1,403 per covered entity

These fees apply per subsidiary and will be adjusted annually, which is an important budget consideration for companies with complex structures.

Doing Business in California: How CARB Defines In-Scope Entities for 2024 Reporting

Who’s “doing business” in California? Determining scope remains one of the most challenging issues. To date, “doing business in CA” means an entity generally must …

• Be a business entity (corporation, LLC, partnership, etc.) organized under U.S. laws (California, other U.S. states or DC, or under a U.S. Congressional act)
• Be engaged in transactions for financial or pecuniary gain or profit (i.e. actively operating in a commercial capacity)

Plus at least one of the following must occur in any part of a reporting year:

• The entity is organized or commercially domiciled in California.
• Its sales in California exceed a threshold — for 2024 that is approximately $735,019 (inflation-adjusted). Its real property + tangible personal property in California exceed either the inflation-adjusted threshold (~ $73,502) or 25% of its real & tangible personal property.
• Amount of compensation paid (payroll) in California exceeds the inflation-adjusted threshold (~ $73,502) or 25% of its total compensation.

Subsidiaries of non-U.S. parents that do business in California are still considered in scope. Exemptions include nonprofits, government entities, the California Independent System Operator, and companies whose only California presence is teleworking employees.

CARB plans to publish a list of covered entities based on the California Secretary of State’s records. If you fall into one of these categories, you may be spared – but don’t assume. In addition, CARB  has made clear that even if you are not on the list of covered entities published, it is the responsibility of corporations to determine whether they are in scope of the reporting rules.

The “On-ramp” Approach to SB 261

CARB emphasized that its guidance is meant as an on-ramp: a way for companies to begin reporting in “good faith” and improve over time. Notably, CARB referenced the  TCFD-aligned disclosure for the UK public sectors: Application Guidance as a resource for formulating compliance statements. What stands out in this document is the phased approach to implementation and expectations.

Key expectations include:

• Disclose on the reporting framework used (TCFD, IFRS S2 or CSRD, assuming the ESRS disclosures are equivalent; CDP is not sufficient).
• Explanations for missing disclosures along with future plans.
• Climate Scenario Analysis (CSA) is encouraged but NOT required in the initial report.
• Use the best available data – even if it is from 2024
• GHG inventories may be omitted in the first SB 261 filing but are required in subsequent years under SB 253.
• Reports must be posted to the company website (no microsite) by Jan 1, 2026 and shared with CARB by June 30, 2026. CARB will open a public docket for companies to post a link to their public reports on December 1^st.

Whether CARB will provide feedback on these reports is not clear.

SB 253 Timelines Confirmed

CARB reaffirmed CA SB 253’s original reporting and assurance timeline:

• Scope 1 & 2 Data: Disclose data and emissions from FY 2025 with limited assurance by June 30, 2026.
• Scope 3 Data: Disclosure beginning in 2027 for FY 2026.
• Future Assurance Timeline: Limited assurance for Scope 3 by 2030; reasonable assurance for Scope 1 & 2 by 2030.
• Assurance standards are still under review, with standards such as ISSA 5000, AA1000, ISO 14060 under consideration. Qualifications for assurers are also being determined, but CARB expects to leverage existing verification body requirements – not create new ones. CARB did indicate that they may choose to internally audit assurance and reporting activities.
• CARB will publish a template for how to report GHG data next week (week of September 22).

California Climate Disclosure Requirements: Practical Steps for CSRD and IFRS Alignment

The direction is clear: disclose in good faith, start with what you have, and build overtime. California has created the most ambitious climate disclosure program in the U.S., designed to align with global frameworks such as CSRD and IFRS S2. The “200s” may feel overwhelming, but the minimum disclosure checklist shows CARB wants to give companies an on-ramp towards compliance. Plan for continuous improvement since a sound climate disclosure is not a one-time exercise but rather is developed over time with careful planning. Practical near-term steps every company can benefit from include:

• Benchmarking against industry peers and trends
• Training and capacity building on GHG data collection and climate-risk identification
• Determining who will champion the disclosures
• Integrating climate data into existing risk management systems
• Building and ensuring robust documentation to support every disclosure
• Evaluate business operations to determine boundaries for a Scope 1 and 2 GHG inventory and understand the processes and systems for tracking data needed for its development.

Stay tuned for insights on turning compliance into a competitive advantage.

Disclaimer: This blog is for informational purposes only and does not constitute legal or compliance advice. Companies should consult with legal counsel and relevant experts to determine specific obligations and develop a tailored compliance strategy.

Sources for all articles:

Climate Related Financial Risk Disclosure Draft Checklist. CARB. Posted September 2, 2025. https://ww2.arb.ca.gov/sites/default/files/2025-09/Climate%20Related%20Financial%20Risk%20Report%20Checklist.pdf.

SB 253/261/219 Public Workshop: Regulation Development and Additional Guidance. August 21, 2025. https://ww2.arb.ca.gov/sites/default/files/2025-08/SB%20253%20261%20workshop%20slides%208-21.pdf.

California State Legislature. Senate Bill No. 253: Climate Corporate Data Accountability Act. 2023. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB253. Accessed 31 Mar. 2025.

California State Legislature. Senate Bill No. 261: Climate-Related Financial Risk Disclosure Act. 2023. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB261. Accessed 31 Mar. 2025.

California State Legislature. Senate Bill No. 219: Climate Accountability Implementation Act. 2024. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB219. Accessed 31 Mar. 2025.

California Air Resources Board. Approved Comments: Climate Corporate Data Accountability Act (SB 253) and Climate-Related Financial Risk Disclosure (SB 261). California Environmental Protection Agency, https://ww2.arb.ca.gov/approved-comments?entity_id=41096. Accessed 31 Mar. 2025.

 

From California SB 343, to Colorado’s HB 2201355, to the EU Green Claims Directive, regulators around the world are cracking down on greenwashing regulations and putting companies on notice. The message is clear: If you say our product is recyclable, it better be true.

California Senate Bill 343 is one of the most stringent and enforceable laws regulating environmental marketing claims regarding recyclability of products and packaging materials. With the release of the CA SB 343 Final Findings Report on April 4, 2025, the countdown has begun for companies to bring their packaging and sustainability claims into full compliance by October 4, 2026.

Who Should Pay Attention?

Businesses that create, manufacture, import, or sell consumer goods, including brand owners, retailers, packaging designers, printers, and labelers, should be aware of the important regulations set forth in CA SB 343. If your product or packaging includes any sustainability claims, whether explicit or implied, it’s crucial to ensure compliance with these guidelines. This includes any statements suggesting that your product is eco-friendly or encouraging consumers to recycle or compost. If you’re operating in California and promoting environmentally friendly initiatives while using materials like plastic, glass, metal, ceramic, paper, fiber, wood, or organic substances, it’s essential to take proactive steps to align with these regulations.

The Era of Loose Recycling Claims is Over

CA SB 343 targets greenwashing head-on by establishing strict requirements for organizations that wish to make recyclability claims in their products or packaging. It prohibits the use of the Universal Recycling Symbol (the Mobius Loop) and the placement of resin identification codes within the symbol unless the product or packaging material meets strict statewide criteria for recyclability. The law will remove vague or misleading claims about recyclability, ensuring that only genuine, compliant products can make such claims. CalRecycle is responsible for determining the percentage thresholds for recyclability claims in the current Findings Report and any subsequent reports to follow.

If your label says it is recyclable, it must meet the following thresholds:

• Be collected in curbside recycling programs that service at least 60% of Californians
• Be sorted into defined streams by at least 60% of the statewide recycling programs
• Be used as feedstock in the production of new products or packaging (i.e., products routinely made using recycled materials)

If your product does not check all three boxes, calling it recyclable or displaying the Mobius Loop is considered a “deceptive or misleading claim” under California law. Such violations are classified as misdemeanors and are subject to enforcement by the Attorney General, local prosecutors, and private lawsuits under unfair competition laws.

Why Businesses Should Care About Greenwashing Regulations

SB 343 is part of a global regulatory shift toward validated sustainability marketing. Brands that take proactive steps will protect themselves from risk and potentially gain a competitive advantage in a market increasingly shaped by customer trust and regulatory scrutiny.

By October 2026, companies must:

• Audit all current California-bound products and packaging to verify alignment with SB 343 recycling criteria.
• Remove or revise any noncompliant recyclability claims or symbols that cannot be substantiated.
• Strengthen data-tracking methods to document and prove the validity of sustainability claims.
• Stay on top of evolving guidance from CalRecycle, which will update findings every five years. The first update will be issued in 2027.

How GSI Can Help

Don’t wait until 2026. Navigating SB 343 compliance is a chance to build resilience and gain customer trust. At GSI, we specialize in helping companies bridge the gap between sustainability goals and regulatory compliance. Our team of scientists, engineers, and environmental experts can map your full packaging inventory against SB 343 standards, assess recyclability and compostability using recognized testing protocols, flag at-risk SKUs, recommend design or material alternatives, and provide documentation and claim substantiation for audits or legal scrutiny. We can also develop tracking methods to ensure outbound products meet the various compliance markets beyond California.