On January 28, 2025, the Colorado House in its Energy and Environment Committee proposed House Bill 25-1119. See attached draft copy at https://leg.colorado.gov/sites/default/files/documents/2025A/bills/2025a_1119_01.pdf.
Like the New York bill, if enacted, the Colorado bill would become the second or third set of bills passed in the United States which are aimed at requiring entities with connections to Colorado to report on their greenhouse gas emissions under Scope 1, Scope 2 and Scope 3 beginning in 2028. Colorado would join California and likely New York (if New York’s bill moves to passage) as the third state in the US in requiring this type of reporting for companies with over $1 Billion in revenue.
Between Colorado at $437 billion, New York at $1.6 Trillion of real GDP and California at $2.9 Trillion of real GDP, these three states together would represent more than 21.5% of the US’s real GDP being subject to Scope 1, 2 and 3 reporting requirements for greenhouse gas emissions.
California passed their version of a very similar reporting bill, SB 253, in 2023, with an effective date of January 2026. New York’s bill, if enacted, required regulations to be passed by December 31, 2026, with an effective reporting requirement for entities subject to the bill during 2027 for Scope 1 and 2 and 2028 for Scope 3. Colorado’s bill if passed will require reporting of Scope 1 and 2 by January 1, 2028, and Scope 3 by January 1, 2029.
As readers will likely recall and as commented on in our piece on New York, the SEC had pursued a similar path during 2023 and 2024, issuing proposed rules, and then final rules and then revised final rules which were then challenged and consolidated into one case in the 8th Circuit. The SEC’s final rules only required reporting on Scope 1 and 2 after receiving a backlash of comments about required Scope 3 reporting. As of February 11, 2025, the SEC’s acting Chairman Mark Uyeda said that the Commission will pause litigation of its climate disclosure rule in the 8th Circuit case, effectively ending, for now at least, the SEC’s pursuit of federal rules focusing on climate disclosure of Scope 1 and 2 greenhouse gases for reporting companies.
Despite the SEC’s position, it appears that states will continue to pursue their own path regarding climate disclosure. While California’s law had been challenged by various parties, earlier this month on February 3, 2025, the District Court for the Central District of California issued an order (https://www.troutman.com/a/web/gEwAfXN75c6MMmenKh3yd3/us_dis_cacd_2_24cv801_d96315207e190_order_granting_defendants_motion_to_dismiss_plaint.pdf) dismissing constitutional challenges posed to SB 253 and SB 261 and clears a path for the California Air Resources Board to develop necessary implementing regulations.
The Colorado and New York bills are very similar to the California bill and require reporting starting in 2027 and additional reporting in 2028 for New York and starting in 2028 and continuing in 2029 for Colorado. The bills also require either a third-party verification in the case of Colorado, or a third-party report of limited assurance on Scope 1 and 2 in 2027 and a reasonable assurance report starting in 2031.
Note that the Colorado bill includes a $100,000 fine per day for failing to file the applicable report.
If Colorado follows the path of California here, companies with limited contacts to Colorado will find themselves subject to this reporting regime and need to put in the work to measure, monitor and report on their Scope 1, 2 and 3 greenhouse gas emissions if they have sales of over $1 Billion Dollars (and those sales need NOT be in Colorado alone, rather they are in the aggregate and likely will include subsidiary and related entities).
Green Spouts: While it is highly likely that various parties like the US Chamber of Commerce (who sued California for implementing SB 261 and 253) will also attempt to block Colorado from implementing its version of HB 25-1119, given the District Court’s ruling noted above, it appears that if passed in Colorado, that the constitutional challenges raised by the plaintiffs are not likely to withstand Colorado court scrutiny and Colorado could join California (and New York) as requiring such reporting as early as 2028. Again, the Bill needs to clear the House Committee and then needs to be voted on and approved by the full House, the Senate and also needs the Governor’s signature, but it appears that these steps are not only possible but likely in 2025, partially/fully in reaction to the Federal government’s overall environmental position and its position taken in withdrawing from the SEC Final rules on climate disclosure. This author’s view is that the Bill will likely pass in Colorado and New York and be signed by the respective Governors, will attract challenges like California’s version did and that those challenges under Colorado and New York law will survive such a challenge and that these laws will become a reality during 2025/2026.
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