US State Specific Climate Disclosure Regulatory Activities in 2025

This blog was originally posted on 3rd March, 2025. Further regulatory developments may have occurred after publication. To keep up-to-date with the latest compliance news, sign up to our newsletter.

AUTHORED BY ALEX LI, REGULATORY COMPLIANCE SPECIALIST, COMPLIANCE & RISKS

The future of climate disclosures as a regulatory tool to mitigate climate change and facilitate greater corporate responsibility is now under challenge in the United States. While the landmark Final Rule on climate disclosures titled “The Enhancement and Standardization of Climate-Related Disclosures for Investors” was issued by the Securities and Exchange Commission (SEC) in March 2024, it was immediately challenged in court and the SEC decided to voluntarily stay its application in April. Following the recent shake-up in the White House and the fundamental changes in policy priorities, the fate of the Rule hangs in the balance.

Nevertheless, state-level efforts have ramped up in a bid to fill this regulatory gap. Inspired by legislative developments in California, the states of New York, Colorado, New Jersey and, most recently, Illinois have all proposed their own versions of climate disclosure bills in 2025.

Here we provide a breakdown of the main contents of these proposals.

New York

Introduced on 27 January 2025 by New York State Senator Hoylman-Siegel, Senate Bill 3456 “Climate Corporate Accountability Act” is a reintroduction of SB 897A, which was initially proposed in 2023 but failed to pass. The functioning of SB 3456 is very similar to the Californian Senate Bill 253 (Climate Accountability Act) in that it requires companies with total revenues in excess of one billion US dollars doing business in New York State to disclose the following information:

Scope 1 and 2 GHG emissions, starting in 2027 and annually thereafter;
Scope 3 GHG emissions, starting in 2028 and annually thereafter.

Under the proposal, entities would be required to measure their GHG emissions in accordance with the Greenhouse Gas (GHG) Protocol Corporate Accounting and Reporting Standard and the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard, unless the department adopts an alternative standard. The GHG emission data must furthermore be verified by third-party assurance, moving from limited assurance in 2027 to reasonable assurance in 2031. Limited assurance for scope 3 GHG emission data might be required in additional department regulations beginning in 2031. The administration of the reporting obligations will be covered through fees to be paid by the covered entities.

The bill is now being discussed in the Environmental Conservation Committee. If enacted, it is proposed to become effective 180 days after its adoption.

Colorado

Colorado House Bill 25-1119 or the proposed ‘Greenhouse Gas Emissions Act’ was introduced on 28 January 2025. Similar to its Californian and New York counterparts, the bill seeks to require companies operating in the state (including subsidiaries) with revenues in excess of one billion US dollars to disclose the following information:

Scope 1 and 2 GHG emissions, starting in 2028 and annually thereafter;
Scope 3 GHG emissions, partial disclosure for purchased goods, capital goods and product use starting in 2029 and additional categories in 2030 and 2031, and annually thereafter.

It is proposed in the bill that all disclosures must be independently verified by a third-party auditor. The bill also allows companies to refrain from disclosing certain information based on free speech grounds. Companies should notify the Attorney General in advance, if they do not wish to disclose. If enacted, the bill shall take effect after a 90-day period unless a referendum is filed, in which case it would go to a November 2026 vote.

New Jersey

New Jersey Senate Bill 4117, otherwise known as the “Climate Corporate Data Accountability Act” was introduced on 3 February 2025. The bill defines “reporting entities” as US entities doing business in the state with annual revenues in excess of one billion dollars, who would be required to disclose the following information:

A report on GHG emissions to the Department of Environmental Protection (DEP) and a a non-profit organization selected by the DEP, three years after enactment and annually thereafter;
Scope 1 and Scope 2 emissions to the public, four years after enactment and annually thereafter;
Scope 3 emissions to the public, five years after enactment and annually thereafter.

An assurance engagement report prepared by an independent third-party assurance provider shall be disclosed by the reporting entity along with their Scope 1 and Scope 2 emissions as reporting on these publicly become mandatory four years after the bill’s enactment. Engagement will commence at a limited assurance level and transition into a reasonable assurance level eight years after the bill’s enactment.

The bill proposes that a non-governmental organization shall be appointed to manage and publicize the reports and that the collection of fees from reporting entities is to cover related administrative costs. It also provides for a relief allowing companies already reporting under the California “Climate Corporate Data Accountability Act” (SB 253) to use the same reports to fulfill the reporting obligations under this bill if it is enacted.

Illinois

On February 18, 2025, the Illinois House of Representatives introduced House Bill 3673 or the proposed “Climate Corporate Accountability Act”. US businesses doing business in Illinois with over one billion US dollars in annual revenue are proposed to disclose their greenhouse gas emissions according to the rules, which are to be adopted by the Secretary of State by 1 July 2026.

Reporting entities must begin disclosing emissions on 1 January 2027, and annually thereafter according to the bill. Disclosures shall include Scope 1, Scope 2 and Scope 3 emissions using the GHG Protocol Corporate Accounting and Reporting Standard and the GHG Corporate Value Chain (Scope 3) Accounting and Reporting Standard. The emissions registry or third-party auditors approved by the Secretary of State would also be needed to independently verify the climate reports.

If enacted, the bill will enter into force upon approval.

Conclusion

Despite the differences in reporting timeline and content requirements, the bills share a common objective of promoting greater transparency, accountability and enforcement in climate disclosures. These initiatives have the potential to push forward climate disclosures in the US in a time of enormous uncertainty and inspire further state legislatures to follow suit.

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