Will New Climate Legislation Impact Your E-Waste Process?
The short answer is yes. Processing e-waste falls under Scope 3 emissions as defined by the Greenhouse Gas Protocol. Scope 3 includes indirect emissions that occur in two broad categories within a company’s value chain:
- Upstream emissions: Emissions from sources like supplier activities, transportation of goods, and employee commuting.
- Downstream emissions: Emissions from the use of sold products, waste disposal, and end-of-life treatment of goods.
E-waste would be considered “downstream emissions” and depending on factors such as where you conduct business, your annual revenues, and if you are public or private…you could be subject to annual reporting on the Scope 3 emissions created in your e-waste process.
Several states have already implemented legislation around these reporting requirements and many more states have new laws under consideration. It’s important to familiarize yourself with the new regulations, and reporting requirements, to avoid fines for non-compliance. Following is a summary of some active and pending legislation.
California
SB 253
California Senate Bill 253 (SB 253), known as the Climate Corporate Data Accountability Act, mandates that large public and private companies operating in California with annual revenues exceeding $1 billion must publicly disclose their greenhouse gas (GHG) emissions. This comprehensive reporting includes Scope 1 (direct emissions), Scope 2 (indirect emissions from energy consumption), and Scope 3 (all other indirect emissions, such as those from the supply chain).
The reporting requirements are being implemented in phases:
- 2026: Companies must begin annual reporting of Scope 1 and Scope 2 emissions, based on 2025 data.
- 2027: Annual reporting expands to include Scope 3 emissions, based on 2026 data.
- 2030: Companies are required to obtain reasonable assurance for Scope 1 and Scope 2 emissions data, ensuring higher accuracy and reliability.
Non-compliance with SB 253 can result in significant penalties, including fines up to $500,000.
SB 261
California Senate Bill 261 (SB 261), known as the Climate-Related Financial Risk Act, requires large businesses operating in California to assess and publicly disclose their climate-related financial risks. Specifically, companies with annual revenues exceeding $500 million must prepare reports detailing the financial risks they face due to climate change and the measures they are adopting to mitigate these risks.
The key requirements of SB 261 include:
- Climate-Related Financial Risk Reports: must prepare a report disclosing their climate-related financial risks and the strategies implemented to reduce and adapt to these risks.
- Biennial Reporting: These reports are to be updated and published every two years.
- Public Accessibility: Companies are required to make these reports publicly available on their websites, ensuring transparency for investors, stakeholders, and the general public.
The first reports are due by January 1, 2026, with subsequent reports required every two years thereafter. Non-compliance with SB 261 can result in penalties, including fines up to $50,000.
Illinois
House Bill 4268
HB 4268, first read into the Illinois Legislature in January 2024, closely tracks the requirements of California’s SB 253. Known as the Climate Corporate Accountability Act, HB 4268 requires public and private US companies doing business in Illinois with greater than $1 billion in total annual revenue to annually disclose and verify Scopes 1 and 2 emissions for the prior calendar year starting on January 1, 2025.
Under HB 4268, Scope 3 emissions reporting would be due no later than 180 days after Scopes 1 and 2 emissions are disclosed.
New York
Senate Bill 897, Assembly Bill 4123 and Senate Bill 5437
The New York Legislature also has introduced its own version of California’s SBs 253 and 261. SB 897 and AB 4123 establish the Climate Corporate Data Accountability Act, which requires public and private US companies doing business in New York with greater than $1 billion in total annual revenue to annually disclose and verify Scopes 1 and 2 emissions before July 1 of each year, and Scope 3 emissions before December 31 of each year.
SB 5437 requires public and private US companies doing business in New York with greater than $500 million in total annual revenue to annually submit a climate-related financial risk report to the secretary of state and ensure the report is available to the public.
Washington
Senate Bill 6092
SB 6092, also known as the Climate Corporate Data Accountability Act, was introduced in the Washington Legislature in January 2024, and similarly requires public and private US companies doing business in Washington with greater than $1 billion in total annual revenue to annually disclose and verify Scopes 1 and 2 emissions by October 1, 2026, and Scope 3 emissions by October 1, 2027.
U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) has introduced rules to enhance and standardize climate-related disclosures for public companies. These rules aim to provide investors with consistent, comparable, and reliable information regarding the financial impacts of climate-related risks on a company’s operations and how these risks are managed.
Key Provisions of the SEC’s Climate Disclosure Rules:
- Climate-Related Risks: Companies are required to disclose any climate-related risks that have materially impacted, or are reasonably likely to materially impact, their business, financial condition, or results of operations.
- Greenhouse Gas Emissions: Disclosure of direct (Scope 1) and indirect (Scope 2) greenhouse gas emissions is mandatory. Additionally, disclosure of certain indirect emissions from upstream and downstream activities in a company’s value chain (Scope 3) is required if material or if the company has set a GHG emissions target that includes Scope 3 emissions.
- Climate-Related Financial Metrics: Companies must include climate-related financial metrics in their audited financial statements, providing quantitative information on the impact of climate-related events and transition activities.
- Governance and Oversight: Disclosure of the board’s oversight of climate-related risks and management’s role in assessing and managing those risks is required.
- Targets and Goals: If a company has set climate-related targets or goals, it must disclose the specifics of these targets, the metrics used to assess progress, and the strategies in place to achieve them.
Implementation Timeline:
The rules were adopted on March 6, 2024, with a phased implementation schedule based on company size and filing status. For large filers, the requirements begin with annual reports for the fiscal year ending December 31, 2025.