Colorado is proposing House Bill 25-1119, requiring businesses with over $1 billion in revenue to report greenhouse gas emissions. The law mandates reporting for direct and energy-related emissions starting in 2027, and gradually expands to cover broader indirect emissions (Scope 3) by 2031. The feasibility of the reporting requirements and the potential influence of business lobbying remain key concerns.
Colorado is advancing legislation that mandates businesses disclose their greenhouse gas emissions, aligning with a growing trend among states post-Paris Agreement. Following the U.S. Securities and Exchange Commission’s recent changes to its climate-related reporting requirements, House Bill 25-1119 will target businesses with over $1 billion in revenue, requiring them to begin reporting emissions as early as 2027.
This bill is modeled after California’s Climate Accountability Package and aims to ensure consistent reporting of greenhouse gas emissions across businesses. It stipulates that firms must disclose direct emissions (Scope 1) and those tied to energy consumption (Scope 2) starting January 1, 2027, and gradually introduce Scope 3 emissions by as late as January 1, 2031.
Scope 3 emissions encompass a broader range of indirect emissions, including those from supply chains and waste. Notably, the bill requires reporting the preceding year’s emissions on January 1, which may be impractical due to reporting timelines of multiple jurisdictions. While enforcement will fall to state attorneys, resulting in significant penalties for non-compliance, the feasibility of compliance timelines remains a concern.
The approval of this bill is uncertain, particularly given the influence of the business lobby. However, with Democratic control of both the Colorado Senate and House, along with Governor Jared Polis, there is a favorable environment for the bill’s passage. Stakeholders will be closely watching legislative developments as efforts to mitigate climate impacts unfold.
The proposed Colorado legislation aims to enhance transparency regarding greenhouse gas emissions from large businesses in the state, following initiatives in California. As companies are required to report emissions in increasing detail over several years, challenges related to reporting timelines and compliance enforcement will need careful consideration. The legislative process will reveal the viability of this significant regulatory shift in managing climate-related business practices in Colorado.
Original Source: www.forbes.com
