Supported by The Climate Center

SB 261 (Stern) Financial risk related to the climate crisis

COP26 Mobilization in Quezon City, Philippines
COP26 Mobilization in Quezon City, Philippines. Image by AC Dimatatac \

Existing law, The California Global Warming Solutions Act of 2006 (Act) requires the State Air Resources Board (ARB) to adopt regulations to require the reporting and verification of statewide greenhouse gas (GHG) emissions and to monitor and enforce compliance with the Act. The Act requires the ARB to make available, and update at least annually, on its website the emissions of GHGs, criteria pollutants, and toxic air contaminants for each facility that reports to the ARB, as provided.

SB 261, sponsored by California Environmental Voters, would require, on or before December 31, 2024, and annually thereafter, a covered entity (any business entity with total annual revenues in excess of five hundred million dollars that does business in California) to prepare a climate-related financial risk report disclosing the entity’s climate-related financial risk and measures adopted to reduce and adapt to climate-related financial risk disclosed.

This bill would require the covered entity to submit to the ARB, and make available to the public on its own website, a copy of the report and to submit to the Secretary of State a statement affirming, not under penalty of perjury, that the report discloses climate-related financial risk.

This bill would also set forth the duties of the Climate-Related Risk Disclosure Advisory Group, including the duty to collect and review climate-related financial risk reports received in the prior calendar year and the duty to annually prepare a public report that contains specified information, including a review of the disclosure of climate-related financial risk contained in climate-related financial risk reports and an analysis of the systemic and sector-wide climate-related financial risks facing the state. The bill would also require the Office of Planning and Research to serve as the administrative staff for the advisory group.

Committee Location: APPROVED on 3/15/23 in Senate Env. Quality Committee. Also referred to the Judiciary Committee.

Full bill text and related info.

Bill Author: Senator Henry Stern: