Colorado’s Climate Disclosures (HB25-1119)?

New regulations and laws are constantly being introduced to understand and track the impacts of climate change. One such effort is embodied in Colorado’s Climate Disclosures or HB25-1119. This legislation mandates reporting greenhouse gas emissions transparency, starting with Colorado entities.

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What is Colorado’s Climate Disclosures (HB25-1119)?

Colorado House Bill HB25-1119 is a legislative effort to ensure companies disclose their greenhouse gas emissions. Specifically, it mandates that businesses operating in Colorado with revenues exceeding $1 billion annually provide a detailed report on their total greenhouse gas emissions.

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If turned into law,  Colorado would join the ranks of California’s SB 253 and potentially New York’s S3456, aiming for a 2028 reporting start for Scope 1, Scope 2, and Scope 3 emissions. These states would represent a significant portion of the US economy actively mandating emission disclosures.

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How does HB25-1119 work?

• It mandates that reporting entities (those doing business in Colorado with over $1 billion in total revenue) publicly disclose their greenhouse gas emissions. 
• The bill allows a district attorney or the attorney general to bring a civil action against a reporting entity for failing to comply with the disclosure requirements. If the reporting entity is non-compliant, a court may require them to pay a civil penalty of up to $100,000 for each day of non-compliance.
• The Colorado Air Quality Control Commission may adopt rules to implement the section, including rules to adjust the reporting deadlines.
• A reporting entity that declines to disclose information based on freedom of speech shall submit a statement to the attorney general describing the general nature of the information withheld and the justification for the withholding.
• A reporting entity compliant with the requirements of another state or country with equally or more stringent requirements is deemed compliant with this bill.

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Calculating Emissions Data

HB25-1119 prescribes using the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard and the Corporate Value Chain (Scope 3) Standard. These standards, developed by leading global organizations, provide a robust framework for calculating emissions accurately.

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Information Included with Disclosures

Each emissions report must incorporate the legal name of the reporting entity alongside any subsidiaries, logos, and fictitious names. Additionally, the third-party auditor responsible for verifying these disclosures must be named in the report.

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What are the requirements of HB25-1119?

HB25-1119 lays out specific obligations for businesses in Colorado to provide detailed reporting on their greenhouse gas emissions. Companies subject to this legislation must disclose:

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• Scope 1 Emissions: Direct emissions from sources that a business owns or controls, like fuel combustion.
• Scope 2 Emissions: Indirect emissions from the consumption of purchased electricity.
• Scope 3 Emissions: These are broader, encompassing indirect emissions from a company’s supply chain, business travel, waste management, and more.

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The requirements dictate that businesses must adhere to the Greenhouse Gas Protocol standards to ensure accurate emissions calculation. These disclosures must also be substantiated by independent third-party verification.

Furthermore, companies must include identifying information in their reports, such as their legal name, fictitious names, and logos.

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When does HB25-1119 become mandatory?

HB25-1119 specifies a phased approach for Scope 3 emissions reporting, spread over a few years:

• By January 1, 2029: Companies must report emissions from purchased goods, services, capital goods, and the use of sold products.
• By January 1, 2030: The scope is broadened to include emissions from fuel-related activities, operational waste, and product life cycles.
• By January 1, 2031: This final phase mandates the inclusion of emissions from upstream and downstream transportation, business travel, employee commutes, and leased assets.

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These timelines are designed to help businesses gradually adapt to comprehensive emissions tracking and reporting, facilitating compliance while expanding their environmental accountability.

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Who needs to comply with Climate Disclosures HB25-1119?

Essentially, HB25-1119 applies to any entity operating within Colorado with annual revenues exceeding $1 billion. This encompasses the total revenues of subsidiaries conducting business in the state, significantly expanding the scope of compliance.

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Why should you care about HB25-1119?

Compliance with HB25-1119 is not merely about meeting legislative requirements. It reflects a broader move towards transparency and accountability in addressing climate change. Civil penalties for non-compliance potentially reach $100,000 per day, which underscores the seriousness with which Colorado is tackling this issue.

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Significantly, HB25-1119 aligns with similar efforts in California and New York, meaning businesses failing to comply may face repercussions across a significant portion of the US economy.

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How can Arbor help you with HB25-1119?

Arbor stands as a valuable partner for businesses navigating the requirements of HB25-1119. With its expertise in carbon accounting, Arbor’s platform measures emissions, including product-level details, accurately. The platform's automated system reduces human error and accelerates emission calculations, ensuring you meet every compliance requirement precisely.

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Summary

Colorado’s HB25-1119 introduces a rigorous framework for the disclosure of greenhouse gas emissions, impacting businesses with revenues over $1 billion in the state. 

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Starting in 2028, with phased requirements continuing until 2031, this legislation aims to provide detailed insights into the emissions of major economic players.

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Firms failing to comply might face penalties, compelling a proactive approach to implementing these disclosure requirements. Arbor can streamline this journey, equipping businesses with accurate carbon data and facilitating compliance with efficiency and confidence. By embracing HB25-1119, entities comply with state law and contribute positively to global climate actions.

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Measure your emissions with Arbor

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