Core Insights - The report from Sphera highlights the ongoing challenges and developments in sustainability reporting, particularly regarding climate-risk disclosures and scope 3 emissions [4][5][8] Regulatory Landscape - The U.S. SEC has reduced its support for climate-risk disclosure rules, while the EU has narrowed the scope of its Corporate Sustainability Reporting Directive [4] - New legislations, such as California's Senate Bill 253 and the EU's Sustainable Finance Disclosure Regulation, are emerging and applying pressure on companies to enhance sustainability practices [4] Industry Trends - Nearly 40 global jurisdictions are adopting climate disclosures aligned with the ISSB's frameworks, indicating a growing trend towards standardized sustainability reporting [5] - 73% of sustainability leaders reported that their companies are voluntarily disclosing data on scope 3 emissions, despite a fragmented regulatory environment [8] Resource Allocation - A significant challenge for companies is the lack of dedicated sustainability teams, with only 14% of leaders indicating that their sustainability efforts are led by a chief sustainability officer [6] - 27% of respondents reported having teams of 10 or fewer working on sustainability initiatives [6] Data Quality Challenges - Ensuring the quality of scope 3 emissions data remains a major issue, with only 9.25% of respondents relying solely on spend-based data, which is often less accurate [7] - 45% of leaders indicated they have limited assurance in the quality of their scope 3 emissions data [8] Budget and Reporting Trends - 59% of sustainability leaders increased their companies' sustainability budgets for 2025, reflecting a commitment to enhancing sustainability efforts [8] - 80% of leaders stated that recent regulatory changes have accelerated sustainability reporting, particularly for scope 3 emissions [8]

Core Insights - Companies are increasingly requesting emissions data from their vendors, integrating these requirements into vendor contracts to enhance sustainability efforts [1][2] - Compliance with new regulations can provide companies with reputational and competitive advantages, as many view emissions disclosures as a strategic move [2] - The implementation of California's SB 253 and SB 261 laws will require public and private companies generating over $1 billion in revenue to disclose their greenhouse gas emissions starting in 2026, with scope 3 emissions reporting commencing in 2027 [4][6] Regulatory Framework - SB 253 and SB 261 are the first laws in the U.S. mandating full disclosure of total greenhouse gas emissions and climate risks, aimed at increasing transparency for investors and consumers [5][6] - Companies must report scope 1 and 2 emissions by 2026, while scope 3 emissions, which encompass a broader range of activities, will be required starting in 2027 [4][18] - The California Air Resources Board is in the process of implementing these laws, with potential regulations expected by the end of the year [19] Emissions Tracking and Reporting - Companies are advised to begin tracking their emissions sources, focusing on the 15 categories defined by the Greenhouse Gas Protocol for scope 3 emissions [13][15] - The process of collecting emissions data can be complex, requiring collaboration across supply chains to ensure accurate reporting [12][16] - Companies like Amcor are actively working to standardize data collection from suppliers to improve their emissions reporting and aim to reduce scope 3 emissions by 32.5% by 2033 [11][18] Industry Response and Tools - Service providers are developing tools and advisory services to assist companies in tracking their emissions for compliance with SB 253 [16] - Companies such as Orbis are already tracking and sharing their scope 1, 2, and 3 emissions data with customers, highlighting the importance of emissions data in decision-making [7][8] - The use of industry average-based data can serve as a starting point for companies that have not yet begun collecting emissions data from suppliers [20] Legal and Market Implications - A federal court ruling has allowed the enforcement of SB 253 and SB 261 to proceed as planned, despite ongoing legal challenges [21] - Other states are considering similar disclosure rules, indicating a potential trend towards increased regulatory scrutiny on emissions reporting [22] - California's ambitious disclosure requirements are prompting significant interest from companies seeking to adapt to the evolving landscape of climate disclosure [24]