California recently passed the Voluntary Carbon Market Disclosures Act (AB 1305) (VCMDA). The new “anti-greenwashing” law is one of the first laws in the U.S. to not only regulate the voluntary carbon market, but also require entities – both public and private – to provide publicly available disclosures aimed at increasing transparency and accountability around certain climate-related claims and the use of voluntary carbon offsets (VCOs) . This legal update provides an overview – in Q&A format – of the new law, its potential impact and what entities that are subject to the legislation should be doing to prepare.
The VCMDA is part of the recent flurry of climate-related disclosure laws passed in California. The VCMDA goes into effect on January 1, 2024. The law took the form of California Assembly Bill 1305 and is known as the Voluntary Carbon Market Disclosures Act. The VCMDA applies to both public and private entities, and does not include revenue or other eligibility thresholds. It also does not distinguish between U.S. and non-U.S. entities. Therefore, as long as an entity meets the California nexus requirements, both public and private and U.S. and non-U.S. entities will be subject to the law.
Access the complete update “New California Anti-Greenwashing Law Goes Live on January 1, 2024 – What you need to know if you make certain “green” claims” by Mayer Brown here.
