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The Impact of US SEC and California Regulations on Air Management

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Recent developments in air management regulations within the United States have brought increased attention to air quality and
greenhouse gas emissions reporting.
The Securities and Exchange Commission (SEC) and the state of California have introduced groundbreaking rules designed to reshape how companies approach air pollution and climate-related disclosures.

In this blog, we’ll cover:

  1. The SEC Climate Disclosure Rule
  2. California’s Climate Disclosure Laws
  3. How these regulations will impact air management
  4. Challenges and controversies of these regulations

SEC Climate Disclosure Rule

In March 2024, the SEC finalized its climate disclosure rule, a major step toward standardizing climate-related financial risk reporting for public companies.
This rule requires large public companies to disclose their Scope 1 and Scope 2 greenhouse gas emissions—subject to a materiality threshold.

Although the final version softened earlier proposals (notably by removing mandatory Scope 3 emissions reporting), it still marks a significant shift toward corporate environmental transparency.

The rule aims to give investors consistent, comparable information about companies’ climate-related risks and strategies, including:

  • Disclosure of material climate-related risks
  • Reporting on climate risk management processes
  • Information on how climate risks affect business strategy and outlook

California’s Climate Disclosure Laws

In October 2023, California passed two major climate disclosure laws: SB 253 and SB 261.
These go beyond the SEC’s requirements and reflect California’s leadership in climate policy.

  • Applies to both public and private companies doing business in California
  • Mandates Scope 1, 2, and 3 emissions disclosure
  • Requires reporting on climate-related financial risks

California’s regulations are more comprehensive and stringent, reinforcing the state’s commitment to tackling climate change and improving air quality.

Impact on Air Management

These new rules are expected to create a lasting impact on air quality management. Companies will be compelled to:

  • Monitor and report emissions more closely
  • Improve transparency around environmental impact
  • Consider emission reductions across their supply chains (especially in California due to Scope 3 requirements)

This could incentivize sustainable practices across industries. Additionally, the increased availability of emissions data will allow investors to make more environmentally conscious decisions—potentially driving capital toward cleaner technologies and practices.

Challenges and Controversies

The rollout of these regulations isn’t without challenges:

  • Legal uncertainty: Questions remain about whether the SEC’s rule preempts California’s stricter laws, potentially causing reporting inconsistencies.
  • Reporting burden: Smaller companies may struggle with the technical complexity of emissions calculations and disclosures.
  • Materiality clause loophole: Critics argue that the SEC’s materiality threshold could allow companies to underreport their environmental impact.

These challenges may hinder the effectiveness of the regulations and create confusion among stakeholders.

Final Thoughts

The SEC and California’s climate disclosure rules represent a significant evolution in the way companies manage and report air quality and climate-related risks.
While implementation challenges remain, these changes are expected to:

  • Elevate corporate focus on air management
  • Encourage more transparent and sustainable business practices
  • Drive long-term improvements in air quality and emissions reduction

Interested in Solutions?

Want to learn more about how Cority’s
Environmental and
Sustainability Cloud platforms can help organizations manage evolving air management regulations?
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Bill Palmer

Bill Palmer is a Product Marketing Manager supporting Cority’s Environmental solution. Bill has worked for over 20 years in EHS with leading global companies in the chemical, consumer goods, and academia sectors. Throughout his career, Bill has operated at both the operational and executive echelons, aiding teams in the development of robust systems and EHS-oriented cultures that propel organizational success. Before joining Cority, Bill was the Corporate EHS Leader with Pilot Chemical Company. Bill is a Certified Safety Professional (CSP) and a Certified Hazardous Materials Manager (CHMM).