California Climate Disclosure Rules, ESG Compliance and Scope 3 Reporting Risks [Podcast]

Short summary

California's new climate disclosure rules (SB 253, SB 261) are reshaping ESG compliance by shifting focus from stalled federal initiatives to state-level and international frameworks. Scope 3 emissions reporting—covering supply chain and indirect activities—presents the biggest compliance and verification challenge for companies. Directors face increasing litigation exposure and Caremark liability if their governance systems lack adequate ESG auditing, monitoring, and oversight capabilities.

• •California regulations (SB 253/261) establish state-level ESG disclosure standards as federal momentum stalls
• •Scope 3 emissions reporting (supply chain, indirect activities) creates significant measurement and verification challenges
• •Directors face board-level liability under Caremark doctrine if ESG monitoring and audit systems are inadequate

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