Litigation Team Provides Insight into California’s New ESG Laws

In an article written for the Daily Journal titled, Turning Up the Heat for California’s Class Action Climate, litigation & enforcement partners Amy Jane Longo, Rocky Tsai, and associate Tristan Lim detail the nature of new potential class action claims and how companies can guard against the risk of unwanted collateral litigation arising from these and other new ESG disclosure requirements.

“California’s new ESG disclosure laws, creating reporting obligations for companies doing business in California, will require a large number of companies to disclose their Scope 1, 2 and 3 greenhouse gas emissions and climate-related financial risks consistent with the recommendations of the Task Force on Climate-Related Financial Disclosures, as well as related remedial measures,” said Amy, Rocky, and Tristan.

The bills include: the Climate Corporate Data Accountability Act (“SB 253”), the Climate-Related Financial Risk Act (“SB 261”), and the Voluntary Carbon Market Disclosures Act (“AB 1305”).

“With the passage of SB 253, SB 261, and AB 1305, businesses should be aware of potential collateral litigation that can stem from California’s consumer protection laws,” the authors said.

In addition, “as companies continue to use terms like “net zero emissions” and “carbon neutral, lawsuits challenging companies’ representations of being environmentally friendly are on the rise,” said Amy, Rocky, and Tristan. “Also known as “greenwashing” claims, these lawsuits are based on allegations that a company’s public statements pertaining to its efforts to be more environmentally friendly are either inaccurate or unsubstantiated.”