This series of posts seeks to identify legal questions that can add definition and value to the good work that sustainability teams are doing.
Ask if your sustainability team handling the climate-related financial disclosure report required by California Health and Safety Code Section 28533 has done a scoping exercise to identify the specific entities in the enterprise that do business in California and have at least $500 million of revenue (regardless of whether the revenue is from California sales). "Doing business in California" is likely to be determined with reference to California state tax code provisions that look at sales, real property and employees in California, which are relatively modest. However, not every entity that is part of an enterprise will necessarily be doing business in California. For example, entities that focus on business in the EU or Asia may have no contact with California and may not be covered as a result.
"Covered entity" means a corporation, partnership, limited liability company, or other business entity formed under the laws of the state, the laws of any other state of the United States or the District of Columbia, or under an act of the Congress of the United States with total annual revenues in excess of five hundred million United States dollars ($500,000,000) and that does business in California. Applicability shall be determined based on the business entity's revenue for the prior fiscal year.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
