Filling the Gap: U.S. States Take Charge on Climate Disclosures
Introduction
As legal challenges continue to delay the finalization of the SEC Climate Rule, the uncertainty around federal climate-related disclosure mandates remains. In the absence of federal leadership, states like California, Illinois and Washington have begun taking decisive steps to create their own regulation aiming to bring transparency and accountability, helping investors, regulators, and the public understand the full scope of corporate carbon footprints.
If you're curious about the SEC Climate Rule and what to expect next, check out our breakdown here.
California Leading the Charge
California has long been at the forefront of climate regulation, and its efforts continue to set an example for other states. You can learn more about California’s initiatives in our deep dives on SB 261, SB 253 and AB 1305.
Now, let’s explore how other states are stepping up.
Illinois Climate Corporate Accountability Act (HB 4268)
Disclosures Required
If passed, the regulation will require annual disclosure of:
Scope 1: Direct emissions
Scope 2: Indirect emissions from purchased energy
Scope 3: Emissions from the entire value chain
In addition, the law will mandate third-party assurance on disclosed emissions to ensure accuracy and reliability.
Companies in Scope
HB 4268 applies to public and private U.S. entities doing business in Illinois that generate $1 billion or more in revenues.
Key Dates
January 1, 2025 : Companies must begin disclosing scope 1, 2 and 3 emissions for fiscal year 2024
Current status: The bill is currently in the Illinois House of Representatives and can be considered until January 5, 2025. If it is not passed by then, it will need to be reintroduced
Washington Climate Corporate Data Accountability Act (SB 6092)
Disclosures Required
Similar to the Illinois regulation, Washington’s act would require annual disclosure of:
Scope 1: Direct emissions
Scope 2: Indirect emissions from purchased energy
Scope 3: Value chain emissions
In addition, the law will mandate third-party assurance on disclosed emissions to ensure accuracy and reliability.
Companies in Scope
SB 60921 applies to public and private U.S. entities doing business in Washington with $1 billion or more in revenues
Key Dates
January 1, 2025: The Washington Department of Ecology must adopt guidelines for reporting
October 1, 2026: Companies must disclose Scope 1 and Scope 2 emissions for the 2025 calendar year, with third-party assurance
October 1, 2027: Companies must disclose Scope 3 emissions, with third-party assurance
Current Status: The bill is currently in the Washington House of Representatives. If it is not adopted in the 2024 session, it will need to be reintroduced in 2025
Preparing for U.S. Regulations
Stay Informed and Ready for the Future
As the regulatory landscape evolves, emissions reporting is becoming increasingly important, driven not only by potential new regulations but also by rising investor expectations. Emissions reporting is likely to be a key expectation in the future, making early awareness and preparation valuable steps. Keeping an eye on how regulations develop — whether from the SEC, California, Illinois, Washington, or other states — will help you stay prepared.
Our Recommendation
The time to act is now. Waiting for final regulation approval may leave companies scrambling to meet requirements at the last minute. Early preparation not only ensures compliance but can position your company as a sustainability leader. With regulations evolving at both the state and federal levels, companies should focus on building adaptable systems that can respond to future legislative changes.
Establishing efficient systems today will allow your business to meet evolving stakeholder demands from investors to consumers.
Where Bespoke ESG Can Support
We’re ready to help you navigate this complex regulatory landscape and position your company for success, regardless of where the next regulatory challenge arises.
Emissions Tracking & Reporting: We offer tailored solutions to help companies track, monitor, and report on GHG emissions across all scopes. We align our systems with state-specific regulations and provide training programs to build your team’s capacity for managing GHG reporting
Preparation for Third-Party Assurance: Our experts can guide you through a readiness assessment to identify gaps prior to your assurance process, ensuring that your data is audit-ready and meets the standards required by the regulations
Tailored Compliance Solutions: Whether you're operating in California, Illinois or Washington, Bespoke ESG provides tailored support to meet the unique needs of your business as you navigate these new requirements
Reach out to us to learn how we can help you with your regulatory needs!
Disclaimer: The information provided in this document is for general informational purposes only and does not constitute legal advice. Regulatory advice is provided solely within the scope of contracts between Bespoke ESG and its clients.