New regulations and laws at the federal and state levels in America are expected to establish obligatory requirements for thousands of companies to provide climate-related reporting. This is according to a report recently released by Sustainable Fitch, the sustainability-focused analytics business by Fitch Group.
This report comes after the U.S. Securities and Exchange Commission (SEC) approved a new rule that establishes mandatory reporting requirements for public companies in the United States. Earlier in the year, the SEC announced requirements for public American companies to provide disclosure on climate risks that their businesses dealt with, plans to address these issues and greenhouse-gas emissions from their operations.
At the state level, California approved the Climate Corporate Data Accountability Act in 2023. This law puts forward requirements for companies with revenues that exceed $1 billion and conduct their businesses in the state to annually report on their emissions. The reports should include emissions from the use and purchase of electricity, direct emissions and indirect value-chain emissions. This law also requires companies to acquire third-party assurance for their emissions reporting.
Other states, including Illinois and New York, are also developing their own compulsory laws on climate reporting.
In its report, Sustainable Fitch notes that Illinois’ and New York’s measures are set to widen obligatory climate-disclosure requirements to parties doing business in America. The report also calls attention to the impact of the proposed Federal Supplier Climate Risks and Resilience Rule, as proposed by the Biden administration.
The rule would require all federal contractors with more than $7.5 million in yearly contracts to report direct emissions as well as emissions generated from the use and purchase of electricity.
The Sustainable Fitch report also observes that while these issues continue to play out at the state level, parties at the federal level are working toward another goal. Since SEC has release the rules, there have been various issues, including a suit filed by 10 states that hope to block the rules’ implementation.
In the lawsuit, the plaintiffs ask the court to repeal the rule as unlawful. Additionally, Nomad Proppant, a frac sand company, and oil-field services company Liberty Energy have filed a petition at the Fifth Circuit U.S. Court of Appeals to issue an administrative stay that will temporarily suspend the climate-disclosure regulation.
In addition to these federal issues, the U.S. Supreme Court made a ruling last month in Loper Bright Enterprises v. Raimondo. This ruling sets a precedent that may lead to a reduction in the ability of federal agencies to implement rules on matters to do with the environment. Instead, states will take the lead, and companies such as Coyuchi Inc. will have to keep an eye out for any new ESG regulations at state level requiring them to tweak their reporting systems to comply with those changes.
NOTE TO INVESTORS: The latest news and updates relating to Coyuchi Inc. are available in the company’s newsroom at https://ibn.fm/COYU
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