Summary

This bill amends the environmental conservation law to require companies that do business in New York with an annual revenue of $500 million or more to begin disclosing climate-related financial risks in 2026.

Explanation

This legislation requires companies that do business in New York with annual revenues of $500 million or more to prepare a climate-related financial risk report. The report will be produced biennially beginning in January of 2026, increasing transparency from the private sector as New York adapts to the impacts of climate change and climate policy.

There are two forms of risk that companies face as a result of climate change, physical risks and transition risks. Physical risks are risks that are either event driven or longer term that result from increased extreme weather events and temperature changes, the availability of natural resources, food security, and employee safety. These can lead to increased operating costs, reduced revenue from decreased production capacity or lower sales output.

Transition risks are associated with the pace at which an organization adapts to efforts to reduce greenhouse gas emissions and transition to renewable energy. These require policy, legal, technology, and market changes to mitigate the impacts of climate change. The transition can impact revenue due to shifts in consumer behavior, operating costs, energy costs, workplace culture and employee retention, and capital investments.

By requiring large companies to disclose climate-related financial risks, this bill can prevent the continuation of trade practices that exacerbate the impacts of climate change. Transparency from the private sector is critical; New York needs all the information out on the table in order to properly enforce the Climate, Leadership, and Community Protection Act.

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