California Regulates Green Claims: AB 1305 Takes Effect
Green Claims Get a Reality Check in the Golden State: California's AB 1305 Takes Effect.
Don’t let the name of this Assembly Bill fool you. While it’s called Voluntary Carbon Market Disclosures Act (AB-1305) and sounds like it should only be relevant for people engaged in carbon offsets, read the fine print, its impacts are wider reaching.
Broadly, the legislation covers any claims around carbon offsets, carbon neutral status, or net-zero goals. The legislation also includes the term ‘other claims’ which some organizations have interpreted to mean any claim that relates to emission reduction. To comply with the law, businesses must now provide detailed information information about their green claims. For instance, companies claiming carbon neutrality are required to disclose the specifics of carbon management programs, including emissions scope and methods of achieving offsets or reductions.
Value of Third-Party Verification:
While not universally mandatory, AB 1305 encourages businesses to validate their sustainability claims through third-party verification. This adds a layer of credibility to the claims made by these companies.
Carbon Offset Transparency:
While the law is not just about carbon offsets, it requires companies to detail any voluntary carbon offsets (VCOs). This includes comprehensive information about the projects that contribute to these offsets, such as project names and types, emission reduction protocols, and third-party verification statuses.
Civil Penalties for Non-Compliance:
Unlike other regulations like SB 253 and SB261, where there are revenue thresholds of $500,000 and 1 billion, AB 1305 applies to public and private companies of any size that operate within California. Violations of this legislation can result in civil penalties of $2,500 per day, with a cap of $500,000, emphasizing the seriousness with which California is addressing greenwashing.
As your business navigates these new regulations, it is crucial to ensure compliance with AB 1305 to mitigate risks and maintain credibility in environmental marketing claims. For further details, you can visit the California Air Resources Board website and review the Bill Text here
Example Disclosures:
Here is an example of four companies from four different sectors that have made public disclosures on their websites.
Aptiv (link)
Bank of America (link)
Tractor Supply Company (link)
Williams-Sonoma (link)
Next Steps: To navigate the complexities of AB 1305 effectively, consider these actionable steps:
Review Your Current Claims: Assess all existing marketing materials and sustainability claims to ensure they align with the new disclosure requirements. Identify any areas needing adjustment or additional information.
Develop a Comprehensive Disclosure: Create a detailed disclosure that outlines your carbon management programs, emission scopes, and methods for achieving offsets or reductions. This should be clear, concise, and readily available on your website. See our template for tips on what to include.
Seek Third-Party Verification: Although not mandatory, obtaining third-party verification can enhance your credibility and demonstrate a commitment to transparency. Research reputable organizations that specialize in sustainability assessments.
Monitor Compliance Regularly: Establish a regular review process to ensure ongoing compliance with AB 1305. This includes annual updates to your disclosures and staying informed about any changes in the legislation.
Consult with Experts: If you need personalized guidance or assistance in drafting your disclosures, don’t hesitate to reach out to our expert team. We can provide tailored support and resources to help you meet regulatory requirements effectively.
Legal Disclaimer: The information provided in this blog post is for general informational purposes only and should not be construed as legal advice. While we strive to ensure that the information is accurate and up-to-date, laws and regulations may change. It is recommended that businesses consult with legal professionals to ensure compliance with all applicable laws, including California's AB 1305.
