March 1, 2024
AB 1305: Voluntary Carbon Market Disclosures Act
Are you prepared for California’s new rules on carbon offsets and climate claims?
This resource paper explains California’s Voluntary Carbon Market Disclosures Act (AB 1305), helping companies understand its broad requirements, disclosure obligations, and the steps necessary to comply.
Key Findings
First-of-its-kind law — Effective January 1, 2024, AB 1305 makes California the first state to regulate the voluntary carbon market and climate-related claims.
Wide disclosure scope — Entities must disclose substantiating evidence if they sell, market, or purchase carbon offsets, or make climate-related claims such as net zero or carbon neutrality.
Applies broadly — Unlike SB 253 and SB 261, AB 1305 applies to U.S. and international entities operating in California, with no revenue threshold.
Summary
AB 1305 was enacted to curb “greenwashing” by increasing transparency into climate-related claims and the voluntary carbon market. While overshadowed by California’s SB 253 and SB 261, AB 1305 has broader application, impacting companies that market or use carbon offsets as well as those making climate-related claims. Organizations subject to the law must now provide clear, public disclosures that substantiate their claims.
What You’ll Learn
This resource paper outlines the key requirements of AB 1305, explains how the law applies to different types of companies, and provides practical next steps for compliance. It is designed to help organizations navigate disclosure obligations and avoid reputational and regulatory risks tied to climate claims.
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