Even as the ESG debate rages on, the direction of travel is clear: sustainability reporting is not slowing down. Some have pointed to political pushback or the SEC’s climate disclosure rules saga as signs of retreat. But let’s focus on the signal, not the noise. Across the globe, frameworks like the EU’s Corporate Sustainability Reporting Directive (CSRD) and the International Sustainability Standards Board (ISSB) are moving full steam ahead, with companies already deep in data collection, assurance, and disclosure. Investors are adjusting their expectations, and multinational corporations are embedding these requirements into supplier contracts.
This regulatory momentum is not just global, it is here at home. California has enacted two groundbreaking laws, SB 253 and SB 261, that will bring climate reporting mandates to thousands of companies. At the same time, Extended Producer Responsibility (EPR) legislation is spreading rapidly across states, fundamentally shifting the cost and accountability for packaging and product waste. These requirements are no longer theoretical, they are about to become operational, with reporting deadlines just around the corner.
Understanding the New Regulatory Landscape
California’s SB 253, also known as the Climate Corporate Data Accountability Act, requires companies with over $1 billion in annual revenue doing business in the state to disclose their greenhouse gas emissions. That includes not just Scope 1 and 2 (direct operations and purchased energy) but Scope 3, emissions embedded across supply chains and product use, often the most complex and largest share of a company’s footprint. The first reports are due in 2026 for Scopes 1 and 2, with Scope 3 following in 2027. Importantly, this law includes assurance requirements, escalating from limited assurance to reasonable assurance over time.
SB 261 complements this by requiring companies with more than $500 million in revenue to prepare biennial climate-related financial risk reports. These disclosures, due starting in 2026, will examine how climate change affects strategy, governance, and resilience, making climate risk a boardroom issue rather than a sustainability silo.
On another front, EPR laws are reshaping the economics of packaging. Under EPR, companies that put packaging or certain products into a state’s marketplace are financially and operationally responsible for their end-of-life management. That means paying into Producer Responsibility Organizations, reporting detailed data on packaging types and volumes, and potentially facing higher fees for materials that are harder to recycle. States including California, Oregon, Colorado, and Maine are already rolling out requirements, and others are following. The patchwork may vary, but the direction is unmistakable: accountability for packaging is shifting upstream to producers.
Why Waiting Is Risky and Costly
The instinct to wait until every detail of these laws is finalized is understandable. But waiting carries more risk than action. Compliance is not optional, and delaying preparation only compresses already ambitious timelines for data collection, supplier engagement, and assurance. Companies that start now will not just avoid penalties; they will position themselves to use this moment strategically.
A recent Bain & Company study underscores the opportunity. Companies that actively embrace sustainability not only reduce risk but also outperform peers in revenue growth and cost efficiency. The report highlights that more than 70% of executives believe sustainability initiatives will create significant long-term value, while those who treat compliance as a burden risk missing out on competitive advantage. In other words, regulatory pressure can be leveraged into operational excellence, cost savings, and market differentiation, if tackled proactively.
The compliance angle matters most here: SB 253, SB 261, and EPR are laws with teeth. Enforcement mechanisms, penalties, and reputational risks are very real. But forward-thinking leaders will recognize that the same systems built for compliance, robust data tracking, supplier collaboration, and transparent reporting, also create insights that drive smarter business decisions. From identifying inefficiencies in packaging design to understanding climate risks across global supply chains, these requirements can sharpen performance in ways that directly impact the bottom line.
What You Should Do Now
Preparation doesn’t have to be overwhelming, but it does have to begin immediately. Companies should start by determining whether they are subject to these laws, mapping out the specific reporting requirements and timelines that apply. Next, they need to establish governance: who owns the data, who coordinates with suppliers, who ensures assurance readiness. Auditing current systems for emissions, packaging, and risk data will expose gaps, and those gaps take time to fill. From there, the focus should be on building reliable processes and engaging suppliers early, since Scope 3 emissions and packaging data often depend on upstream collaboration.
Think of this as building a muscle. The sooner organizations start exercising it, the more strength and flexibility they will have when the reporting deadlines arrive. Those that delay will find themselves scrambling, with higher costs, weaker data, and fewer opportunities to turn compliance into strategy.
From Optional to Essential
Major companies have already crossed the Rubicon: compliance obligations are imposing sustainability requirements up the chain. Bain’s recent report also highlights that half of B2B buyers already allocate more business to suppliers with stronger sustainability credentials, and nearly two-thirds plan to do so within three years. If you supply to these companies, your customers’ obligations under laws like SB 253, SB 261, and emerging Extended Producer Responsibility mandates will soon require product, emissions, packaging, and waste data.
Here’s the harsh arithmetic: without credible reporting, robust data, and clear sustainability practices, you risk losing business. Buyers are increasingly walking away from suppliers who can’t meet sustainability criteria. The Bain report shows that in this changing landscape, sustainability isn’t just a nice-to-have, it is becoming one of the top criteria for purchasing decisions (right after quality) and ahead of price in many cases.
Think of the regulatory momentum from SB 253, SB 261, and EPR not simply as a mandate but as a force reshaping customer-supplier relationships. Suppliers who anticipate those requirements will not just avoid being dropped, they will become more attractive, more resilient, and better positioned to grow as their customers do. The question for suppliers isn’t if you will be evaluated on sustainability by tomorrow’s standards, it is when.
Whether you’re just getting started or navigating challenges along the way, we’re here to help you. Get in touch with me at adeblois@longviewstrategies.com.
