DIVISION 11. Climate Risk Disclosures
26000.
(a) As used in this division:(1) “Bank” means a California state bank, as defined in Section 1004, that had holdings of at least one hundred million dollars ($100,000,000) in the prior calendar year.
(2) “Climate-related financial risk” means material risk of harm to immediate and long-term financial outcomes due to climate change, including, but not limited to, risks to corporate operations, provision of goods and services, real estate, supply chains, employee health and safety, capital and financial investments, institutional investments, client investments, financial standing of loan recipients and borrowers, shareholder value, insured assets, consumer demand, and financial
markets and economic health.
(3) “Climate-related financial risk report” means a report submitted to the Department of Financial Protection and Innovation pursuant to Section 26001.
(4) “Commissioner” means the Commissioner of Financial Protection and Innovation.
(5) “Corporation” means a corporation, as defined in Section 162 of the Corporations Code, that had annual gross revenues of at least one hundred million dollars ($100,000,000) in the prior calendar year.
(6) “Credit union” means a credit union that has received a certificate to act as a credit union pursuant to Article 2 (commencing with Section 14154) of Chapter 2 of Division 5 and had holdings of at least one hundred million dollars ($100,000,000) in the prior calendar year.
(7) “Department” means the Department of Financial Protection and Innovation.
(8) “Finance lender” means a finance lender, broker, program administrator, or mortgage originator licensed pursuant to the California Financing Law (Division 9 (commencing with Section 22000)) that had holdings of at least one hundred million dollars ($100,000,000) in the prior calendar year.
(9) “Insurer” means a provider of insurance that has received a certificate of authority pursuant to Article 3 (commencing with Section 699) of Chapter 1 of Part 2 of Division 1 of the Insurance Code and whose annual national premium was at least one hundred million dollars ($100,000,000) in the prior calendar.
(10) “Investment advisor” means a broker-dealer or investment advisor that has
received a certificate of authorization pursuant to Chapter 2 (commencing with Section 25211) of Part 3 of Division 1 of Title 4 of the Corporations Code and had transacted or managed securities for accounts cumulatively totaling at least one hundred million dollars ($100,000,000) in the prior calendar year.
(11) “Mortgage lender” means a mortgage lender that has received a license to operate pursuant to Chapter 2 (commencing with Section 50120) of Division 20 and had mortgage loans cumulatively totaling at least one hundred million dollars ($100,000,000) on its books in the prior calendar year.
(12) “Real estate investment trust” means a real estate investment trust, as defined in Section 23000 of the Corporations Code, that had holdings of at least one hundred million dollars ($100,000,000) in the prior calendar year.
(l3) “Task force” means the Climate Change Financial Risk Task Force.
(b) This section shall become inoperative on January 1, 2025.
26000.
(a) As used in this division:(1) “Bank” means a California state bank, as defined in Section 1004, that had holdings of at least fifty million dollars ($50,000,000) in the prior calendar year.
(2) “Climate-related financial risk” means material risk of harm to immediate and long-term financial outcomes due to climate change, including, but not limited to, risks to corporate operations, provision of goods and services, real estate, supply chains, employee health and safety, capital and financial investments, institutional investments, client investments, financial standing of loan recipients and borrowers, shareholder value, insured assets, consumer demand, and financial markets
and economic health.
(3) “Climate-related financial risk report” means a report submitted to the Department of Financial Protection and Innovation pursuant to Section 26001.
(4) “Commissioner” means the Commissioner of Financial Protection and Innovation.
(5) “Corporation” means a corporation, as defined in Section 162 of the Corporations Code, that had annual gross revenues of at least fifty million dollars ($50,000,000) in the prior calendar year.
(6) “Credit union” means a credit union that has received a certificate to act as a credit union pursuant to Article 2 (commencing with Section 14154) of Chapter 2 of Division 5 and had holdings of at least fifty million dollars ($50,000,000) in the prior calendar year.
(7) “Department” means the Department of Financial Protection and Innovation.
(8) “Finance lender” means a finance lender, broker, program administrator, or mortgage originator licensed pursuant to the California Financing Law (Division 9 (commencing with Section 22000)) that had holdings of at least fifty million dollars ($50,000,000) in the prior calendar year.
(9) “Insurer” means a provider of insurance that has received a certificate of authority pursuant to Article 3 (commencing with Section 699) of Chapter 1 of Part 2 of Division 1 of the Insurance Code and whose annual national premium was at least one hundred million dollars ($100,000,000) in the prior calendar.
(10) “Investment advisor” means a broker-dealer or investment advisor that has received
a certificate of authorization pursuant to Chapter 2 (commencing with Section 25211) of Part 3 of Division 1 of Title 4 of the Corporations Code and had transacted or managed securities for accounts cumulatively totaling at least fifty million dollars ($50,000,000) in the prior calendar year.
(11) “Mortgage lender” means a mortgage lender that has received a license to operate pursuant to Chapter 2 (commencing with Section 50120) of Division 20 and had mortgage loans cumulatively totaling at least fifty million dollars ($50,000,000) on its books in the prior calendar year.
(12) “Real estate investment trust” means any real estate investment trust, as defined in Section 23000 of Part 4 of Title 3 of the Corporations Code, that had holdings of at least fifty million dollars ($50,000,000) in the prior calendar year.
(l3) “Task force” means the Climate Change Financial Risk Task Force.
(b) This section shall become operative on January 1, 2025.
26001.
Before January 1, 2023, and annually thereafter, a bank, corporation, credit union, finance lender, insurer, investment advisor, real estate investment trust, and mortgage lender shall do all of the following:(a) Prepare a climate-related financial risk report disclosing both of the following:
(1) Its climate-related financial risk, in accordance with the recommended disclosures contained in the Final Report of Recommendations of the Task Force on Climate-Related Financial Disclosures (June 2017) or any successor thereto.
(2) Its measures adopted to reduce and adapt to climate-related financial risk, including, but not limited to,
measures to adapt physical assets and supply chains to climate risks, reduce investment exposure in fossil fuel-based and other greenhouse gas-emitting industries, reduce client, customer, employee, and host community exposure to climate change-related risks, and reduce greenhouse gas emissions in operations.
(b) Submit to the department, and make available to the public on its own internet website, a copy of the report required by this section.
(c) Submit to the department a statement affirming that the report prepared and filed pursuant to this section discloses all climate-related financial risk.
26002.
(a) Before January 1, 2023, the Governor shall establish an advisory Climate Change Financial Risk Task Force to assess climate-related financial risk facing investors, corporations, banks, credit unions, mortgage lenders, insurers, and the state.(b) Members of the task force shall include all of the following or their respective designees:
(1) The Controller.
(2) The Treasurer.
(3) The Insurance Commissioner.
(4) The Director of Finance.
(5) The Director of the Governor’s Office of Planning and Research.
(6) The commissioner.
(7) One representative designated by each of the following:
(A) The Board of Administration of the Public Employees’ Retirement System.
(B) The Teachers’ Retirement Board of the State Teachers’ Retirement System.
(C) The President pro tempore of the Senate.
(D) The Speaker of the Assembly.
(c) The Governor or the Governor’s designee shall serve as chair of the task force.
(d) The department shall serve as the administrative staff for the task force.
26003.
The task force shall do all of the following:(a) Collect and review climate-related financial risk reports.
(b) Annually prepare a public report that contains all of the following elements:
(1) The disclosure of climate-related financial risk contained in climate-related financial risk reports.
(2) Analysis of the systemic and sector-wide climate-related financial risks facing the state based on the contents of climate-related financial risk reports.
(3) Identification of inadequate or insufficient
reports.
(4) Proposals for regulatory actions, policies, or reforms needed to mitigate climate-related financial risks, including, but not limited to, legislative recommendations in order to implement current best practices regarding the disclosure of financial risks resulting from climate change.
26004.
(a) The department shall make available to the public, on its internet website, all climate-related financial risk reports.(b) The commissioner may adopt regulations necessary to carry out the provisions of this division.