New York’s Climate challenge: Getting ready for disclosure requirements 

Over the past few years, New York introduced ambitious initiatives to reduce greenhouse gas (GHG) emissions and enhance environmental accountability. Building on this momentum, the state has recently reintroduced two significant climate disclosure bills: Senate Bill 3456 (the Climate Corporate Data Accountability Act) and Senate Bill 3697 (the Climate-Related Financial Risk Reporting Bill). These bills, if passed, will require large corporations operating in New York to publicly disclose their full carbon inventories and climate-related financial risks. This new regulatory landscape represents a critical step in corporate climate accountability, compelling businesses to adopt rigorous reporting practices and align with global sustainability standards. 

What are the New York climate disclosure bills? 

The reintroduced bills aim to increase corporate transparency regarding emissions and climate-related financial risks. 

• Senate Bill 3456 (Climate Corporate Data Accountability Act): This bill requires public and private companies with annual revenues exceeding $1 billion and operating in New York to disclose their GHG emissions annually. The law aligns with the Greenhouse Gas Protocol standards, which are widely recognised as the global benchmark for emissions reporting. 

• Senate Bill 3697 (Climate-Related Financial Risk Reporting Bill): This bill applies to entities with annual revenues exceeding $500 million and operating in New York. It requires biennial reporting on climate-related financial risks, aligning disclosures with the Task Force on Climate-related Financial Disclosures (TCFD) framework. 

Key reporting requirements 

The bills mandate that companies report their emissions across three scopes and assess their climate-related financial risks: 

• Scope 1 emissions: Direct emissions from owned or controlled sources, such as company facilities or vehicles. 

• Scope 2 emissions: Indirect emissions from purchased electricity, steam, heating, or cooling used by the company. 

•  Scope 3 emissions: Indirect emissions across the value chain, including those generated by suppliers, customers, and other third parties. 
  Of these, Scope 3 emissions are often the most challenging to measure due to their complexity and reliance on data from external stakeholders. 

• Climate-Related Financial Risks: Companies must assess and disclose the physical and transitional risks associated with climate change, including potential impacts on their operations, supply chains, and financial performance. These risks align with the Task Force on Climate-related Financial Disclosures (TCFD) framework. 

Timeline for compliance 

The bills introduce a phased timeline for compliance: 

• SB 3456 (Emissions Reporting): 

• 2027: Companies must begin reporting Scope 1 and Scope 2 emissions for the fiscal year (FY) 2026 data. 

• 2028: Scope 3 emissions reporting begins for the FY 2027 data. 

• SB 3697 (Financial Risk Reporting): 

• 2028: Companies must begin biennial reporting on climate-related financial risks. 

Third-Party assurance requirements 

To ensure accuracy and credibility, companies must engage independent auditors to verify their reported emissions data following ISO 14064 as an internationally recognised standard. The specific assurance requirements may vary, but generally follow industry standards for emissions verification. The financial risk reporting may also require independent review or assessment. 

Why New York’s climate disclosure bills matter 

New York’s climate policies have a far-reaching impact, influencing both national and international approaches to environmental regulation. These bills represent a significant step in corporate climate accountability that extends beyond state lines. (Source needed: perhaps a reference to New York’s influence on climate policy) This legislation is poised to set a new standard for emissions reporting and transparency, potentially shaping corporate practices globally. By mandating comprehensive greenhouse gas emissions disclosures, including the challenging Scope 3 emissions, New York is effectively using its market influence to establish climate disclosures as a standard practice in the U.S. and beyond. By mandating public disclosures of GHG emissions and climate-related risks, the bills aim to increase transparency around corporate climate impacts and vulnerabilities. This transparency empowers consumers, investors, and regulators to hold businesses accountable for their environmental performance. 

The financial stakes of non-compliance 

Non-compliance with the New York climate disclosure bills can result in significant financial penalties. (Source needed: citation to the specific penalty amounts in the bills, when available.) Beyond fines, failure to comply could damage a company’s reputation and erode stakeholder trust. 

Aligning with stakeholder expectations 

Investors and consumers are increasingly prioritising sustainability and climate resilience when making decisions. Transparent climate reporting not only meets regulatory requirements but also enhances a company’s credibility and appeal to environmentally conscious stakeholders. 

Navigating the challenges 

While the New York climate disclosure bills represent a positive step toward climate accountability, they also pose significant challenges for businesses. 

1. Scope 3 complexity 

Scope 3 emissions often account for more than 70% of a company’s total carbon footprint, making them critical to understanding overall climate impact. However, collecting accurate data for these emissions is notoriously difficult due to the complexity of value chains and limited data transparency. Many suppliers either do not measure their emissions or are hesitant to share data due to confidentiality concerns or inconsistent reporting formats. These challenges require companies to engage deeply with their supply chain while navigating significant resource and time constraints. 

2. Data accuracy and assurance 

Accurate data collection is essential for third-party assurance audits mandated under the bills. However, many companies lack the internal expertise or systems needed to manage the process effectively. Inconsistent methodologies and incongruent data sources further complicate efforts, often leading to inaccuracies that can undermine reporting credibility. As regulations require independent verification of GHG disclosures, ensuring robust and reliable data becomes paramount. 

3. Climate risk assessment 

Assessing climate-related financial risks requires specialised expertise and robust analytical frameworks. Companies must identify and quantify the potential impacts of climate change on their operations, assets, and liabilities. This process involves modelling future climate scenarios, assessing vulnerabilities, and developing adaptation strategies. 

Best practices for navigating the New York climate disclosure bills 

To overcome these challenges and meet compliance deadlines, businesses should adopt proactive strategies that streamline reporting processes while driving long-term sustainability outcomes. 

1. Develop a comprehensive emissions tracking framework: Establishing a robust emissions tracking system is crucial for SB 3456 compliance. This would involve mapping emission sources, establishing accurate data collection processes, developing custom calculation methodologies, implementing quality control measures, and creating insightful reporting templates. A comprehensive strategy ensures not only compliance but also provides actionable insights for your sustainability goals. 

2. Engage stakeholders across the value chain: Collaboration is key when it comes to Scope 3 emissions reporting. Companies should work closely with suppliers and partners to gather accurate data while fostering a shared commitment to sustainability goals. 

3. Conduct internal audits before third-party assurance: Preparing for third-party assurance audits starts with conducting internal reviews of GHG data. This ensures that any discrepancies are identified and resolved before external verification begins. 

4. Leverage sustainability expertise: Partnering with sustainability consultants like Nexio Projects can provide invaluable support throughout the compliance process—from carbon accounting to supplier engagement strategies to climate risk assessments. 

5. Align climate risk assessments with business strategy: Integrate climate risk assessments into strategic planning processes to identify opportunities for innovation and resilience. 

Conclusion 

The New York climate disclosure bills represent a pivotal moment in corporate climate accountability, not just for New York but potentially globally. By requiring comprehensive GHG emissions disclosures across all three scopes and mandating the assessment of climate-related financial risks, these bills set a new standard for transparency and environmental stewardship. 

For businesses operating in New York, preparing for compliance with these bills may seem daunting at first glance—but it doesn’t have to be. With proactive planning and expert guidance from partners like Nexio Projects, companies can not only meet regulatory requirements but also position themselves as leaders in corporate sustainability and resilience. 

Our services include: 

• Comprehensive carbon accounting aligned with GHG Protocol standards. 

• Supplier engagement strategies designed to simplify Scope 3 data collection. 

• Climate-related financial risk assessments aligned with the TCFD framework. 

• Preparation for third-party assurance audits. 

• Development of tailored sustainability strategies that go beyond compliance requirements. 

• Training workshops for internal teams on carbon management and climate risk best practices. 

We believe that compliance is just the beginning—our goal is to help you turn regulatory challenges into opportunities for innovation and leadership in sustainability. 

Sources 

1. ESG Dive (2025) “New York reintroduces bills seeking climate risk, emissions disclosures”. Available at: [URL] (Accessed: 14 February 2025). 

2. New York State Senate (2025) Senate Bill 3456: Climate Corporate Data Accountability Act. Available at: [URL] (Accessed: 14 February 2025). 

3. New York State Senate (2025) Senate Bill 3697: Climate-Related Financial Risk Reporting Bill. Available at: [URL] (Accessed: 14 February 2025). 

4. Task Force on Climate-related Financial Disclosures (TCFD) (2024) TCFD Recommendations. Available at: https://www.fsb-tcfd.org/recommendations/ (Accessed: 14 February 2025). 

5. Greenhouse Gas Protocol (2024) Corporate Standard. Available at: https://ghgprotocol.org/corporate-standard (Accessed: 14 February 2025).