Save The Blue Frog

Category: Sustainability Accounting

  • California SB 253: A Slight Delay Can’t Stop The Momentum Of Sustainability Reporting

    Sustainability accountants adjust their calendars to reflect the new reporting deadline

    Imagine taking two steps forward and then one step back. Are you, or are you not, still experiencing forward momentum?

    That’s what sustainability accountants are asking themselves after California delayed the initial reporting deadline of its landmark sustainability reporting law by ninety days.  SB 253 initially required companies with more than $1 billion in annual revenues to report their internal greenhouse gas (GHG) emissions to the California Air Resources Board (CARB) by August 10, 2026. But on June 24, 2026, 47 days before this initial deadline, the reporting requirement was delayed by three months to November 10, 2026.

    Incidentally, if you’re thinking that “the law doesn’t apply to me because I’m not a billion dollar company,” think again. Beginning next year, the reporting requirement expands to the inclusion of Scope 3 GHGs throughout the corporate value chain. Scope 3 metrics encompass all external stakeholders of a company, including vendors and customers.

    Thus, beginning next year, if you are an independent liquor store (anywhere in the world) that sells bottles of Gallo brand California chardonnay, your relevant carbon emissions within the value chain of E. & J. Gallo Winery will need to be reported by that supplier. Likewise, if you are a small restaurant that serves the wine to a customer, the winery will need to report your associated emissions data too.

    Indeed, the initial passage of SB 253 was a significant step forward for sustainability accounting. The development of relevant capabilities in California’s largest companies, a development that occurred despite the three month delay, was a second step forward.

    Why did the development of capabilities occur despite the delay? Sustainability accounting and reporting is a complex process that requires far more than 47 days for preparatory activities. No responsible company would have waited until June 24, 2026 to develop the appropriate capabilities.

    By initially passing SB 253 into law so early, and then by waiting so long to announce a brief delay, CARB ensured that the largest firms in the state would develop their sustainability accounting functions. Whether or not the state, federal and judicial branches of government ultimately allow the legal requirements to take effect, CARB has essentially forced companies to invest considerable resources in their GHG measurement and reporting capabilities.

    So think of the slight delay in SB 253 as a small step back after two large steps forward. It may have slowed the momentum of sustainability reporting, but it certainly hasn’t stopped it.

  • For Sustainability Accountants, New Entities Step Forward As The Federal Government Steps Back

    Private Sector Accountants Arrive As Federal Government Accountants Depart

    Sustainability accountants may have been worried when the U.S. Securities & Exchange Commission (SEC) permanently withdrew its climate change (carbon emissions) reporting requirements. What would they do? Were their jobs in jeopardy?

    Apparently, their employment prospects weren’t bleak after all. Last month, the private sector stepped into the void with the launch of the Task Force for Corporate Action Transparency (TCAT). The entity published new corporate standards regarding the reporting of climate change information, emphasizing the need for third party assurance (i.e. independent audit) activities on the data. The Wall Street Journal noted that Netflix, PepsiCo, and eleven other companies were already pilot testing the guidance.

    Likewise, accountants in the medical sector may have been concerned when the U.S. Department of Health & Human Services ceased the collection and reporting of various health metrics. Once again, though, a new entity emerged to assume this function.

    Which entity? Fifteen U.S. states announced the launch of the Governors Public Health Alliance. The group pledged to “share best practices, exchange data and collaborate on emergency response, vaccine policy and other technical issues,” activities that were once performed by federal government agencies. Two other alliances of U.S. states, one located in the Northeastern United States and the other on the Pacific Coast, previously announced similar pledges.

    Professionals across the political spectrum may be well-advised to review the output of these new entities. Those who believe in the federal government’s efforts to limit public reporting may need to understand how these new initiatives are attempting to replace the data. Conversely, those who support the principle of public reporting may need to implement the new guidance.

    Interestingly, it appears that sustainability accountants will continue to be “in demand,” regardless of the federal government’s role in defining relevant metrics and standards. As the federal government steps back and eliminates its requirements, other parties are stepping forward and establishing new expectations.