Corporate climate reporting has come a long way since its initial form decades ago, evolving into a key asset that keeps companies accountable for their sustainability commitments and builds trust with their customers, most of whom prioritize environmental impact in their purchasing decisions. Despite climate reporting growing into a mandatory business requirement, it remains in limbo, largely as a result of the federal government deregulating related climate initiatives and policies.
Today, corporate climate reporting at a federal level, however valuable for a business’s bottom line, remains in question. The Greenhouse Gas Protocol is updating its corporate accounting standards for the first time in decades, including how companies account for electricity and supply chain emissions. The Science Based Targets initiative (SBTi) is likewise revising its own criteria in response, creating uncertainty for companies with existing validated targets. Meanwhile, EPA rollbacks are weakening federal regulation, and a spike in greenwashing litigation is undermining true decarbonization efforts by companies doing the work.
On the other side of the coin, states are shouldering the responsibility for environmental accountability. As the first US state to enact sustainability reporting requirements with the passing of Senate Bill 253, California is anticipating about 4,000 companies to start reporting by the time August comes. Colorado, New York, Illinois, and New Jersey, are following suit, with proposed climate reporting legislation at various stages of progress, setting a blueprint for other regional governments to follow.
Despite the uncertainty surrounding corporate climate reporting in the United States, it’s worth noting that the country remains a global outlier, out of step with the rest of the world. What California is doing isn’t radical – countries like Brazil, China, and the EU and more already have related laws in effect, demonstrating undeniable value for climate transparency and steady progression.
Climate reporting is a state-by-state responsibility
Since the Trump administration took office, we’ve seen several setbacks on the climate action front, from the withdrawal from the Paris Climate Agreement to the rescission of the EPA’s endangerment finding around greenhouse gases threatening public health. Multiple states have since challenged the administration’s actions, demonstrating a larger trend we’re seeing of states taking environmental accountability into their own hands as this becomes deprioritized at the federal level.
Even companies without direct operations in California have reason to pay attention. Supply chains cross state lines, investor portfolios span all fifty states, and a reporting framework enacted by the world’s fifth-largest economy carries weight well beyond its borders. Companies that treat state-level requirements as someone else’s problem are misreading the trajectory: regional laws have a way of becoming the de facto national standard, particularly when institutional investors (who do not manage by geography) begin demanding consistent disclosure across their entire portfolios.
For corporate climate reporting specifically, several states are implementing their own reporting rules. California is requiring businesses in the state to report Scope 1, Scope 2, and Scope 3 emissions — with Scope 1 and 2 disclosures due by August and Scope 3 reporting beginning in 2027 — to ensure reliable information is available for investors and consumers who take emissions into account in their decisions, with New York advancing similar legislation through its Senate. Other states are following their lead: Illinois, Colorado, and New Jersey, have proposed statewide emissions reporting laws, moving the needle forward in terms of continued climate action.
For food companies specifically, Scope 3 is not an abstract compliance challenge, it’s a supply chain data problem. A food manufacturer’s Scope 3 emissions can represent 80–90% of its total footprint, embedded in ingredients, packaging, transportation, and cold storage. Accurate reporting depends entirely on data quality from hundreds or thousands of suppliers, many of whom are small or mid-sized operations with limited sustainability infrastructure. This makes the supplier data gap the defining operational challenge of emissions reporting in the food sector, and it’s one that procurement, sustainability and supply chain teams are uniquely positioned to help solve.
While putting reporting requirements in place does not fully replace broad action toward reducing emissions, they play a critical role in ensuring that corporations keep themselves accountable to standing sustainability commitments, customers and stakeholders are protected and armed with detailed information about the environmental impact of their purchases, and the United States is not being completely left behind as the rest of the world continues to mature in their emissions reductions initiatives.
Impact on corporate social responsibility
With the state of corporate climate accountability unclear at a federal level, companies face a choice: wait for regulatory certainty or build the infrastructure now. Increasingly, leading companies are choosing the latter and framing it not as compliance work but as data strategy.
We’re now at a point where companies are treating emissions data the way they treat financial data. The analogy holds up well under scrutiny: just as poor financial data creates audit risk, investor scrutiny, and regulatory exposure, poor emissions data now carries the same consequences. Companies that invested early in financial reporting infrastructure didn’t do it because they enjoyed compliance — they did it because bad data was a liability. Emissions data is reaching the same inflection point. The biggest challenge remains collecting granular data from suppliers, most of whom vary in sustainability data maturity or lack the infrastructure and interoperability to share it reliably.
There’s an added urgency given rising levels of greenwashing litigation, with many food retailers facing backlash for not having the insights needed to substantiate climate-friendly claims. The regulatory ambiguity at the federal level does not reduce this risk — if anything, it raises it, because companies can no longer point to a single clear standard as cover. Building genuine data quality is the only durable defense.
Conclusion
When asking what the state of corporate climate reporting is today, it depends on where you’re looking. In the United States, some states are taking action to ensure this remains a mandatory requirement in the face of federal uncertainty. More broadly, many countries are further along in cementing these mandates. The bottom line: corporate climate accounting still matters, and the companies building that capability now will be the ones best positioned when the regulatory picture clarifies as it inevitably will.
As policy developments continue to unfold, this is not a time for corporations to sit still and wait for regulatory updates to inform their reporting processes. Rather, this is the time to work with suppliers and partners to strengthen data gathering and sharing plans, align on sustainability goals, and build the infrastructure that ensures the right data is captured to accurately reflect progress. For food and logistics companies in particular, that work starts in the supply chain and the organizations that treat it as a strategic priority today will be the ones setting the standard tomorrow.
