A technical amendment with strategic consequences

When California passed Senate Bills 253 and 261 in 2023, the focus was on their bold requirements for emissions disclosure and climate risk reporting. However, in 2024, Senate Bill 219 (SB 219) quietly reshaped how these laws are implemented.^[1]

Though procedural in nature, SB 219 introduced several important clarifications, particularly regarding how climate-related financial risk disclosures are submitted and managed. Originally, SB 261 required the California Air Resources Board (CARB) to contract with a third-party reporting organization to leverage independent expertise — an essential step in building public trust and supporting effective regulatory oversight.

However, SB 219 revised this requirement in key ways:

• It is no longer mandatory for CARB to contract with a third-party organization.
• Instead, CARB now has the discretion to do so if it deems necessary.
• This change gives CARB greater flexibility in administering the program and aims to help reduce administrative complexity and costs.

CARB can now tailor its oversight approach based on available resources and evolving best practices. By retaining the option to engage independent third-party experts, CARB can improve the credibility and consistency of disclosures while avoiding unnecessary bureaucracy when internal capacity is sufficient. This flexibility carries significant strategic implications, especially for multinational companies navigating complex reporting landscapes.

SB 219 also refines the original legislation by clarifying reporting structures, simplifying administrative processes, and aligning more closely with international environmental, social and governance (ESG) frameworks.^[1] For global enterprises, these changes offer a clearer path to compliance and a valuable opportunity to integrate California’s requirements into broader sustainability strategies.

Parent-level reporting: A structural shift for multinationals

One of the most impactful changes is the explicit allowance for parent-level reporting. Previously under SB 253, it was unclear whether each subsidiary operating in California would need to file separate disclosures. SB 219 confirms that companies may report at the parent entity level, provided the parent meets the revenue threshold and includes all relevant emissions data.^[1]

This update is a game-changer for multinationals. It enables centralized reporting, reduces duplication and aligns with how companies already report under frameworks like the Corporate Sustainability Reporting Directive (CSRD) in the EU. It also simplifies the assurance process by focusing on a single, consolidated report, saving time, reducing costs and improving consistency.

Administrative clarity and reporting efficiency

SB 219 also introduces administrative refinements that make compliance more manageable. It clarifies how disclosure and emissions data will be received and made publicly available by either the state board or a contracted third-party emissions reporting organization.^[1]

Additionally, adjustments to the fee structure remove upfront payment requirements, offering regulators more flexibility and giving companies more predictability in planning their reporting budgets.

Strategic implications for global compliance

These updates allow companies to rethink and streamline their compliance strategies. Parent-level reporting supports a more integrated approach, while administrative clarity reduces uncertainty. For companies already aligning with global frameworks like CSRD and the International Sustainability Standards Board (ISSB), SB 219 makes it easier to embed California’s requirements into existing ESG systems.

This is especially valuable for enterprises operating across multiple jurisdictions. As global climate disclosure rules continue to evolve, the ability to harmonize reporting across frameworks is becoming a strategic advantage — and SB 219 helps make that possible.

A window of opportunity

With clearer rules and more flexible structures, companies now have a window to:

• Consolidate emissions data across entities and geographies
• Align reporting systems with global standards
• Engage suppliers and subsidiaries in emissions tracking
• Prepare for third-party assurance with internal audits and gap analyses

The ongoing California Air Resources Board (CARB) rulemaking process remains highly dynamic, with many key details still in discussion.^[2] While final regulations are far from being settled, this period offers a critical opportunity for companies to engage. By participating in public workshops and submitting comments, businesses can help shape the rules they’ll be required to follow.

A quiet bill with loud impacts

SB 219 may not have made headlines, but its impact is profound. By clarifying reporting structures and easing administrative burdens, it has made California’s climate disclosure laws more navigable, especially for large, complex enterprises. For sustainability and finance leaders, the message is clear: now is the time to act strategically. The path to compliance is clearer, but expectations for transparency and accountability remain high.

How UL Solutions can help

Our sustainability advisory services and software portfolio can help multinational organizations consolidate emissions data across entities and geographies, enabling consistent and efficient reporting. With our ULTRUS™ UL 360 software for ESG data management and our in-house Enterprise Sustainability team of experts, companies can align disclosures with global frameworks like CSRD and ISSB, streamlining compliance and enhancing transparency across jurisdictions.

References

[1] California Air Resources Board. (2024, December). Information solicitation to inform implementation of California climate-disclosure legislation: Senate Bills 253 and 261, as amended by SB 219. https://ww2.arb.ca.gov/sites/default/files/2024-12/ClimateDisclosureQs_Dec2024.pdf

[2] California Air Resources Board. (2025, May 29). California Corporate Greenhouse Gas (GHG) Reporting and Climate-Related Financial Risk Disclosure Programs. https://ww2.arb.ca.gov/our-work/programs/california-corporate-greenhouse-gas-ghg-reporting-and-climate-related-financial