Implementation of climate disclosure requirements

We refer to California Air Resources Board (CARB)’s information solicitation to inform the implementation of Senate Bill 253 (Climate Corporate Data Accountability Act) and Senate Bill 261 (Climate-Related Financial Risk Act), as amended by Senate Bill 219. We appreciate the opportunity to provide input.

Norges Bank Investment Management (NBIM) is the investment management division of the Norwegian Central Bank and manages the Norwegian Government Pension Fund Global. We work to safeguard and build financial wealth for future generations. As of year-end 2024, we managed USD 1,739 billion in assets, of which USD 787 billion was invested in the shares and corporate bonds of U.S. companies. We are a minority shareholder in U.S. companies with an average ownership share of 0.94 percent as of year-end 2024.

As a long-term investor, we consider our returns over time to be dependent on sustainable economic, environmental and social development, as well as on well-functioning, legitimate and efficient markets. Climate change presents financially material risks and opportunities that can already be observed across major asset classes, including equity[1] and corporate debt[2]. The fund is exposed to climate risk and investment opportunities through the companies and assets it invests in. We use climate-related information to assess companies' exposure to climate change and how they manage related financial risks and opportunities. As such, we benefit from reliable, consistent, timely and comparable climate-related financial information across global capital markets, to inform our investment decisions, portfolio analyses and risk management processes.

As an investor in over 65 countries, we have an interest in international harmonisation of disclosure requirements that enhance comparability and market efficiency while minimising reporting burden for companies with operations and value chains spanning multiple jurisdictions. We therefore support climate-related financial disclosures based on globally recognised standards. The implementation of California's climate disclosure requirements presents an opportunity to work towards alignment of reporting practices, benefitting both companies through streamlined reporting and investors through more comparable disclosures.

Please find in Annex 1 to this letter our comments to the consultation questions, focusing on areas where we believe our perspective as a global institutional investor can be most useful. In particular, we support three key principles for implementation:

• Global interoperability: We welcome the reference to the International Sustainability Standards Board (ISSB) standards in SB261 and encourage CARB to continue working towards interoperability with globally recognised standards, notably the ISSB. Consistency with international practice promotes comparable disclosures while minimising reporting burden for companies operating across jurisdictions.
• Standardised approaches: We support disclosure of greenhouse gas emissions in accordance with the GHG Protocol Standard and recommend that assurance requirements be informed by internationally recognised standards. Using established frameworks enhances reliability and comparability of reported information.
• Alignment with financial reporting: We encourage harmonisation of reporting cycles with financial reporting periods and timings where possible. This strengthens connectivity between climate-related and other financial information, and supports timely, effective disclosure and investor decision-making.

We thank you for considering our perspective and remain at your disposal should you wish to discuss these matters further.

Yours sincerely

Carine Smith Ihenacho,
Chief Governance and Compliance Officer

Snorre Gjerde,
Lead Policy Advisor

[1] Bolton, P., & Kacperczyk, M. (2021). Do investors care about carbon risk? Journal of Financial Economics, 142(2), 517-549.

[2] Blasberg A, Kiesel R and Taschini L (2023) Carbon default swap – disentangling the exposure to carbon risk through CDS. Centre for Climate Change Economics and Policy Working Paper 416/Grantham Research Institute on Climate Change and the Environment Working Paper 391. London: London School of Economics and Political Science