Decoding U.S. Climate Regulation in 2024
Climate regulation is evolving the way companies operate in the US, establishing carbon accounting as a core business function.
In an era marked by increasing environmental awareness and the urgent need to address climate change, businesses find themselves at the intersection of sustainability and regulatory compliance. Understanding the intricacies of climate regulation is vital for staying ahead in 2024. Let’s delve into the significance of climate regulation, why businesses should prepare for it, and what the future holds.
The Significance of Climate Regulation
Carbon emissions, particularly in the form of greenhouse gasses, play a pivotal role in climate change. Governments worldwide are prioritizing measures to mitigate these effects, and in the US, regulatory frameworks are being developed to limit carbon emissions from various sectors. This is why it is necessary to learn about the crucial insights into climate legislation that could impact your business, uncovering its significance and profound effects on all businesses.
Key US Climate Regulation as of 2024
Climate Corporate Data Accountability Act, S.B. 253: It will be mandated for certain companies doing business in California to disclose their direct (scope 1), indirect (scope 2), and value chain (scope 3) greenhouse gas emissions for the previous fiscal year. These emissions must be reported to an emissions reporting organization. The effective implementation is set for 2026 for scopes 1 and 2, and 2027 for scope 3.
Climate-Related Financial Risk Act, S.B. 261: This will mandate companies that fit the criteria conducting business in California to disclose climate-related financial risks that follow the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations and initiatives to mitigate and reduce these risks. Companies must prepare and publish a publicly available report on their company's website which will be effective starting 2026.
Climate Mobilization Act: New York passed bills to mitigate greenhouse gas emissions from buildings in the city. Any businesses affected have to ensure their buildings stay below emission caps. It is expected for companies to utilize renewable energy and green innovation. Now companies are aiming to become more sustainable by utilizing renewable energy.
Carbon Accounting is Becoming a Core Business Function
For businesses that have not already established carbon accounting as a core business function, 2024 is the year to roll this out. While some businesses will choose to hire a specialist to gather emission data, fulfill reporting mandates, and launch decarbonization initiatives, others may prefer partnering with a specialized carbon management consulting firm. Through a firm's specialized assistance, companies can be confident during the carbon emission data gathering process that the data is being pulled accurately, efficiently, and calculated in accordance with the Greenhouse Gas Protocol. Engaging with sustainability experts and leveraging tools to measure and track environmental impacts can aid businesses in formulating effective mitigation and adaptation strategies. Fostering a culture of sustainability within the organization and promoting energy-efficient practices can contribute to long-term resilience. By adopting a proactive and comprehensive approach, businesses can not only align with regulatory requirements but also contribute to a sustainable future.
The Future of Climate Regulation
Looking ahead, the future of climate regulation in the US is likely to witness several key developments, with businesses at the forefront of change. California is currently setting an example for other states to follow with its recent legislation. Businesses can expect and prepare for regulations to become more stringent as the government intensifies efforts to meet climate targets. The US will likely collaborate with other nations, resulting in aligning standards and a concerted effort to combat climate change. As governments globally push for change at a faster rate there may be an introduction of economic incentives to encourage businesses to adopt sustainable practices, including tax breaks, subsidies, or other financial rewards for achieving emission reduction goals.
Carbon emission regulation in the US is a pivotal aspect of the broader effort to combat climate change. This is why RyeStrategy works with businesses to educate employees, calculate annual carbon footprints, and coach businesses through the rollout of mitigation strategies that reduce carbon emissions. For those companies supplying goods or services to large companies with net zero commitments, RyeStrategy can also help decode and fulfill supplier climate disclosure requests to ensure retention of key customers.
As the regulatory landscape evolves, businesses should begin implementing their carbon accounting function, seek climate education for employees and decision makers, and embrace sustainable business practices as the US takes action toward a greener, more resilient world.
Disclaimer: These regulations are up to date as of February 2024.
Learn about our affordable carbon footprint solutions for small and medium-sized businesses
Book a free strategy session to discuss your climate goals with a sustainability manager.
Not sure where to start? Learn more about business decarbonization below.
About RyeStrategy
Based in Seattle, RyeStrategy is a CDP-accredited, mission-oriented company specialized in carbon accounting, mitigation coaching, and climate disclosure solutions for organizations at any point in their sustainability journey. Learn how RyeStrategy helped Salesforce, Ideascale, and Wazoku achieve their sustainability goals.
From exhaustive carbon footprinting and mitigation coaching, to setting science-based targets and reporting climate data to CDP, SBTi or custom reporting platforms, RyeStrategy acts as a hands-on extension of the team, custom-tailoring services to fulfill climate disclosure requirements easily and accurately.
Meet with a sustainability specialist to learn more about RyeStrategy solutions.
