If your business is based in California, you’ve probably heard about California’s new climate disclosure laws: SB253 and SB 261. SB 253, or The Climate Corporate Data Accountability Act, and SB 261 pertaining to Greenhouses: Climate-Related Financial Risk, affects businesses with total annual revenues over $500 million. But did you know that even businesses headquartered outside of California with a branch within the State must also adhere to these new bills?
It’s vital that your company is prepared to meet these reporting requirements. What’s a step in the right direction? Start assembling your disclosure task force. These are the people you should have on your team to help your organization disclose an accurate and successful report, in compliance with the new laws.
Keep reading to discover:
According to EcoOnline’s 2024 Sustainability Readiness Report, which surveyed leaders from 6,300 US-based companies with revenues over $500 million a year, these are the departments or groups who are involved in sustainability processes and compliance efforts:
It’s no surprise that sustainability and finance teams are involved, but you might be wondering what part operations, your CEO, and EHS members play. Let’s dive into each department a little deeper to uncover their responsibilities:
Lay the foundation for a successful reporting process with the abovementioned team members by your side.
With your team assembled, it’s time to decide who will be leading this sustainability initiative. According to our report, these are the departments leading this effort:
| 35% ESG or sustainability | 21% finance | 19% board, investor, and/or CEO | 16% operations | 9% EHS |
The expertise and insight offered by the ESG and sustainability team is second to none, which is why they are leading the way across companies in America. But what about the company’s CEO? As previously stated, 40% of respondents stated their CEO had oversight into this process with one fifth of people stating their CEO or board members were actually leading the initiative.
The survey also revealed that 56% of respondents assigned responsibility to a senior or VP leader of the sustainability or finance department.
So, what’s the answer? It’s safe to say that having a senior level representative from your sustainability team is the way to go.
As seen above, only about 9% of respondents mentioned EHS members leading sustainability strategies. Though they may not be the most popular to lead this effort, they’re still a vital part of the team and here’s why.
There’s a strong connection between EHS and ESG with both having a role in reporting environmental factors related to an organization. EHS members may look at environmental factors more holistically, while ESG or sustainability departments get more granular in specific areas.
The method in which data is analyzed and assessed is also shared between these two departments. EHS members have used the same strategies to collect and analyze EHS data in terms of communicating and collaborating with team members across the organization to get the most accurate information. These skills play an important role in your disclosure processes, making EHS members a necessary part of your California climate disclosure task force.
Building your team is an important part of a successful disclosure process. According to the EcoOnline report, 0% of respondents are waiting for sustainability laws to go into effect before building their sustainability program or team, so what are you waiting for? Start assembling your team now.
To dive into more insights from sustainability leaders across America including key findings related to sustainability budgets, net zero target dates, and more, access the EcoOnline 2024 Sustainability Readiness Report now.