What the heck is going on right now?
Nobody knows for sure, but let’s talk about some key aspects related to climate regulation that do not involve the federal government.
For folks in the building design, construction, and operations industries, there’s a lot going on. Heck, there’s a lot going on all over the place right now. Despite widespread deregulation at the federal level, state and local governments are moving forward (as I predicted). California tends to be leading the way, with other states not far behind; and hopefully following California’s lead, so we can avoid a patchwork of differing requirements, but that’s for another post.
Let’s cut through the noise and share a few key things to be aware of:
Carbon claims:
Net Zero, Carbon Neutral, and related claims are under increased scrutiny, especially if carbon offsets are used to support those claims. Attempts to clarify California’s AB 1305 by amendment, towards the end of 2024, were unsuccessful before the legislative clock ran out. That means that the original requirements - vague as they may be - are currently in effect. I call AB 1305 “show your work” legislation. Here’s a few examples of companies that have already posted AB 1305 disclosures (Master Card) (Toyota) (Kaiser Permanente).
As written, the scope of AB 1305’s requirements are not entirely clear; but it does not apply to: “(c) This section does not apply to entities that either do not operate within the state, or that do not make claims within the state.” Contrast that with SB 253 which specifically applies to entities with $1B in annual revenue “doing business in California.” Clear as mud, but all of this climate legislation is new, so let’s all be patient as the details are collectively worked out. There’s little to no precedent, and folks are doing the best that they can.
Carbon Disclosure Laws:
The SEC’s proposed rules were unceremoniously round-filed in early 2025. That said, California is moving forward with carbon disclosure and risk assessment requirements, with other states poised to follow.
Here’s a quick summary with links:
California: SB 253 and 261, has essentially survived legal challenges (for now, info here) and are moving forward, as amended by SB 219, which essentially pushes the dates out, among other things.
Washington: in 2024, Washington introduced legislation similar to California in SB 6092. Yet the final legislation was turned into a wait-and-see exercise, to watch what happened with the SEC’s proposed rules, consider how to align Washington law with those rules, and tasking the Department of Ecology with researching and drafting a report, due January 1, 2025, more on the DOE report, soon.
New York: In January, 2025, similar legislation was re-introduced in the New York Senate as S3456 (Climate Corporate Data Accountability Act) and S3697 (Report of Climate-Related Financial Risk), this is early in the process and something to keep an eye on.
Illinois: Also in January, the Prairie State re-introduced the Climate Corporate Accountability Act HB 3673 (replacing the former HB 4268). This legislation is also very early in the process.
Colorado: Last but not least, at the very end of January, another Democratic state, Colorado, introduced House Bill 25-1119.
New Jersey: Very last but very not least, in February, New Jersey introduced the Climate Corporate Data Accountability Act (S4117).
If you’re doing the math, this means that four states have proposed or re-introduced carbon disclosure legislation in 2025. And, even in the absence of regulation, some new data suggests that 85% of executives plan to move forward with climate disclosures, so, we move boldly forward.
And a similar, state-level trend appears to be taking shape with buy-clean policies (moving forward in New York and Washington, among others) and targeting reduction of operational carbon in the form of building performance and emissions standards.
Let’s keep goooooooing!