Senate Bill S3697A

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  3697--A
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             January 29, 2025
                                ___________
 
 Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Environmental Conservation
   -- committee discharged, bill amended, ordered  reprinted  as  amended
   and recommitted to said committee
 
 AN ACT to amend the environmental conservation law and the state finance
   law,  in  relation  to reporting of climate-related financial risk and
   establishing the climate-related financial risk disclosure fund
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The environmental conservation law is amended by adding a
 new article 77 to read as follows:
                                ARTICLE 77
                      CLIMATE-RELATED FINANCIAL RISK
 SECTION 77-0101. DEFINITIONS.
         77-0102. CLIMATE-RELATED FINANCIAL RISK REPORTING.
 § 77-0101. DEFINITIONS.
   FOR PURPOSES OF THIS SECTION, THE FOLLOWING DEFINITIONS APPLY:
   1. "CLIMATE REPORTING ORGANIZATION" MEANS A NONPROFIT CLIMATE  REPORT-
 ING  ORGANIZATION  CONTRACTED  BY THE DEPARTMENT PURSUANT TO SUBDIVISION
 THREE OF SECTION 77-0102 OF THIS ARTICLE THAT BOTH:
   A. CURRENTLY OPERATES A CLIMATE REPORTING ORGANIZATION  FOR  ORGANIZA-
 TIONS OPERATING IN THE UNITED STATES; AND
   B.  HAS  EXPERIENCE  WITH CLIMATE-RELATED FINANCIAL RISK DISCLOSURE BY
 ENTITIES OPERATING IN NEW YORK.
   2. "CLIMATE-RELATED FINANCIAL RISK" MEANS MATERIAL  RISK  OF  HARM  TO
 IMMEDIATE  AND  LONG-TERM FINANCIAL OUTCOMES DUE TO PHYSICAL AND TRANSI-
 TION RISKS, INCLUDING, BUT NOT LIMITED  TO,  RISKS  TO  CORPORATE  OPER-
 ATIONS,  PROVISION OF GOODS AND SERVICES, SUPPLY CHAINS, EMPLOYEE HEALTH
 AND SAFETY, CAPITAL AND  FINANCIAL  INVESTMENTS,  INSTITUTIONAL  INVEST-
 MENTS,  FINANCIAL STANDING OF LOAN RECIPIENTS AND BORROWERS, SHAREHOLDER
 VALUE, CONSUMER DEMAND, AND FINANCIAL MARKETS AND ECONOMIC HEALTH.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07990-02-5
              

 S. 3697--A                          2
 
   3. "CLIMATE-RELATED FINANCIAL RISK REPORT" MEANS A REPORT REQUIRED  BY
 SUBDIVISION TWO OF THIS SECTION.
   4.  "COVERED ENTITY" MEANS A CORPORATION, PARTNERSHIP, LIMITED LIABIL-
 ITY COMPANY, OR OTHER BUSINESS ENTITY  FORMED  UNDER  THE  LAWS  OF  THE
 STATE,  THE LAWS OF ANY OTHER STATE OF THE UNITED STATES OR THE DISTRICT
 OF COLUMBIA, OR UNDER AN ACT OF THE CONGRESS OF THE UNITED  STATES  WITH
 TOTAL  ANNUAL  REVENUES  IN EXCESS OF FIVE HUNDRED MILLION UNITED STATES
 DOLLARS ($500,000,000) AND THAT DOES BUSINESS IN NEW YORK. APPLICABILITY
 SHALL BE DETERMINED BASED ON THE BUSINESS ENTITY'S REVENUE FOR THE PRIOR
 FISCAL YEAR. "COVERED ENTITY" DOES NOT INCLUDE A BUSINESS ENTITY THAT IS
 SUBJECT TO REGULATION BY THE DEPARTMENT OF FINANCIAL SERVICES,  OR  THAT
 IS IN THE BUSINESS OF INSURANCE IN ANY OTHER STATE.
 § 77-0102. CLIMATE-RELATED FINANCIAL RISK REPORTING.
   1. A. ON OR BEFORE JANUARY FIRST, TWO THOUSAND TWENTY-EIGHT, AND BIEN-
 NIALLY  THEREAFTER,  A  COVERED  ENTITY  SHALL PREPARE A CLIMATE-RELATED
 FINANCIAL RISK REPORT DISCLOSING BOTH OF THE FOLLOWING:
   (I) ITS CLIMATE-RELATED FINANCIAL RISK, IN ACCORDANCE WITH THE  RECOM-
 MENDED FRAMEWORK AND DISCLOSURES CONTAINED IN THE FINAL REPORT OF RECOM-
 MENDATIONS  OF  THE  TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
 (JUNE 2017) PUBLISHED BY THE TASK  FORCE  ON  CLIMATE-RELATED  FINANCIAL
 DISCLOSURES,  OR  ANY  SUCCESSOR  THERETO,  OR PURSUANT TO AN EQUIVALENT
 REPORTING REQUIREMENT AS DESCRIBED IN SUBDIVISION FOUR OF THIS  SECTION;
 AND
   (II)  ITS  MEASURES  ADOPTED  TO  REDUCE  AND ADAPT TO CLIMATE-RELATED
 FINANCIAL RISK DISCLOSED PURSUANT TO THIS SUBPARAGRAPH.
   B. IF A COVERED ENTITY DOES NOT COMPLETE A REPORT CONSISTENT WITH  ALL
 REQUIRED  DISCLOSURES  PURSUANT  TO THIS SUBDIVISION, THE COVERED ENTITY
 SHALL PROVIDE THE RECOMMENDED DISCLOSURES TO THE BEST  OF  ITS  ABILITY,
 PROVIDE  A  DETAILED  EXPLANATION  FOR  ANY REPORTING GAPS, AND DESCRIBE
 STEPS THE COVERED ENTITY WILL TAKE TO PREPARE COMPLETE DISCLOSURES.
   2. CLIMATE-RELATED FINANCIAL RISK REPORTS MAY BE CONSOLIDATED  AT  THE
 PARENT COMPANY LEVEL. IF A SUBSIDIARY OF A PARENT COMPANY QUALIFIES AS A
 COVERED ENTITY PURSUANT TO SUBDIVISION FOUR OF THIS SECTION, THE SUBSID-
 IARY  IS  NOT  REQUIRED  TO PREPARE A SEPARATE CLIMATE-RELATED FINANCIAL
 RISK REPORT.
   3. THE DEPARTMENT SHALL CONTRACT WITH A CLIMATE REPORTING ORGANIZATION
 TO PREPARE A BIENNIAL PUBLIC REPORT  ON  THE  CLIMATE-RELATED  FINANCIAL
 RISK DISCLOSURES REQUIRED BY THIS SECTION.
   4.  A  COVERED ENTITY SATISFIES THE REQUIREMENTS OF THIS SECTION IF IT
 PREPARES A PUBLICLY ACCESSIBLE BIENNIAL REPORT THAT INCLUDES CLIMATE-RE-
 LATED FINANCIAL RISK DISCLOSURE INFORMATION  BY  ANY  OF  THE  FOLLOWING
 METHODS:
   A. PURSUANT TO A LAW, REGULATION, OR LISTING REQUIREMENT ISSUED BY ANY
 REGULATED  EXCHANGE,  NATIONAL GOVERNMENT, OR OTHER GOVERNMENTAL ENTITY,
 INCLUDING A LAW OR REGULATION ISSUED BY THE  UNITED  STATES  GOVERNMENT,
 INCORPORATING  DISCLOSURE  REQUIREMENTS CONSISTENT WITH SUBPARAGRAPH (I)
 OF PARAGRAPH A OF SUBDIVISION ONE OF THIS SECTION, INCLUDING THE  INTER-
 NATIONAL  FINANCIAL REPORTING STANDARDS SUSTAINABILITY DISCLOSURE STAND-
 ARDS, AS ISSUED BY THE INTERNATIONAL SUSTAINABILITY STANDARDS BOARD; AND
   B. VOLUNTARILY USING  A  FRAMEWORK  THAT  MEETS  THE  REQUIREMENTS  OF
 SUBPARAGRAPH  (I)  OF  PARAGRAPH A OF SUBDIVISION ONE OF THIS SECTION OR
 THE INTERNATIONAL FINANCIAL REPORTING STANDARDS  SUSTAINABILITY  DISCLO-
 SURE  STANDARDS, AS ISSUED BY THE INTERNATIONAL SUSTAINABILITY STANDARDS
 BOARD.
   5. TO THE EXTENT A CLIMATE-RELATED FINANCIAL RISK  REPORT  CONTAINS  A
 DESCRIPTION  OF  A  COVERED ENTITY'S GREENHOUSE GASES OR VOLUNTARY MITI-
 S. 3697--A                          3
 
 GATION OF GREENHOUSE GASES, THE DEPARTMENT MAY CONSIDER A COVERED  ENTI-
 TY'S  CLAIMS  IF  THOSE CLAIMS ARE VERIFIED BY A THIRD-PARTY INDEPENDENT
 VERIFIER.
   6. A. ON OR BEFORE JANUARY FIRST, TWO THOUSAND TWENTY-EIGHT, AND BIEN-
 NIALLY  THEREAFTER, A COVERED ENTITY SHALL MAKE AVAILABLE TO THE PUBLIC,
 ON ITS OWN INTERNET WEBSITE, A COPY  OF  THE  REPORT  REQUIRED  BY  THIS
 SECTION.
   B.  (I)  ON  OR  BEFORE  JANUARY FIRST, TWO THOUSAND TWENTY-EIGHT, AND
 ANNUALLY THEREAFTER, A COVERED ENTITY SHALL PAY A FEE, UPON  FILING  ITS
 DISCLOSURE,  TO THE DEPARTMENT FOR THE ADMINISTRATION AND IMPLEMENTATION
 OF THIS SECTION.
   (II) (A) THE DEPARTMENT SHALL SET THE FEE DESCRIBED IN THIS  PARAGRAPH
 AT  AN  AMOUNT ADEQUATE TO COVER THE DEPARTMENT'S FULL COSTS OF ADMINIS-
 TRATING  AND  IMPLEMENTING  THIS  SECTION.  THE  TOTAL  AMOUNT  OF  FEES
 COLLECTED  SHALL NOT EXCEED THE DEPARTMENT'S ACTUAL AND REASONABLE COSTS
 TO ADMINISTER AND IMPLEMENT THIS SECTION.
   (B) THE DEPARTMENT MAY ADJUST THE FEE IN ANY YEAR TO  REFLECT  CHANGES
 IN THE CONSUMER PRICE INDEX DURING THE PRIOR YEAR.
   (III)  THE  PROCEEDS  OF  THE  FEES IMPOSED PURSUANT TO THIS PARAGRAPH
 SHALL BE DEPOSITED IN THE CLIMATE-RELATED FINANCIAL RISK DISCLOSURE FUND
 ESTABLISHED UNDER SECTION NINETY-NINE-SS OF THE STATE FINANCE LAW.
   7. THE CLIMATE REPORTING ORGANIZATION SHALL BE CONTRACTED TO DO ALL OF
 THE FOLLOWING:
   A. BIENNIALLY PREPARE A PUBLIC REPORT THAT CONTAINS ALL OF THE FOLLOW-
 ING ELEMENTS:
   (I) A REVIEW OF  THE  DISCLOSURE  OF  CLIMATE-RELATED  FINANCIAL  RISK
 CONTAINED  IN  A  SUBSET OF PUBLICLY AVAILABLE CLIMATE-RELATED FINANCIAL
 RISK REPORTS BY INDUSTRY;
   (II) ANALYSIS OF THE SYSTEMIC AND SECTOR-WIDE  CLIMATE-RELATED  FINAN-
 CIAL  RISKS  FACING  THE  STATE BASED ON THE CONTENTS OF CLIMATE-RELATED
 FINANCIAL RISK REPORTS, INCLUDING, BUT NOT LIMITED TO, POTENTIAL IMPACTS
 ON ECONOMICALLY VULNERABLE COMMUNITIES; AND
   (III) IDENTIFICATION OF INADEQUATE OR INSUFFICIENT REPORTS.
   B.  REGULARLY  CONVENE  REPRESENTATIVES  OF  SECTORS  RESPONSIBLE  FOR
 REPORTING  CLIMATE-RELATED  FINANCIAL  RISKS, STATE AGENCIES RESPONSIBLE
 FOR  OVERSIGHT  OF  REPORTING  SECTORS,  INVESTMENT  MANAGERS,  ACADEMIC
 EXPERTS, STANDARD-SETTING ORGANIZATIONS, CLIMATE AND CORPORATE SUSTAINA-
 BILITY  ORGANIZATIONS, LABOR UNION REPRESENTATIVES WHOSE MEMBERS WORK IN
 IMPACTED SECTORS, AND OTHER STAKEHOLDERS TO OFFER INPUT ON CURRENT  BEST
 PRACTICES  REGARDING  THE  DISCLOSURE  OF FINANCIAL RISKS RESULTING FROM
 CLIMATE CHANGE, INCLUDING, BUT NOT LIMITED TO, PROPOSALS TO  UPDATE  THE
 DEFINITION  OF  "CLIMATE-RELATED  FINANCIAL  RISK", AND THE FRAMEWORK OR
 DISCLOSURE STANDARD OF "CLIMATE-RELATED  FINANCIAL  RISK  REPORTS"  THAT
 MEETS THE REQUIREMENTS OF SUBPARAGRAPH (I) OF PARAGRAPH A OF SUBDIVISION
 ONE OF THIS SECTION.
   C.  MONITOR  FEDERAL  REGULATORY  ACTIONS  AMONG AGENCY MEMBERS OF THE
 FEDERAL FINANCIAL STABILITY OVERSIGHT COUNCIL, AS WELL  AS  NON-INDEPEN-
 DENT REGULATORS OVERSEEN BY THE WHITE HOUSE.
   8. A. THE DEPARTMENT SHALL ADOPT REGULATIONS THAT AUTHORIZE IT TO SEEK
 ADMINISTRATIVE  PENALTIES  FROM  A COVERED ENTITY THAT FAILS TO MAKE THE
 REPORT REQUIRED BY THIS  SECTION  PUBLICLY  AVAILABLE  ON  ITS  INTERNET
 WEBSITE  OR PUBLISHES AN INADEQUATE OR INSUFFICIENT REPORT. THE ADMINIS-
 TRATIVE PENALTIES AUTHORIZED BY THIS SUBDIVISION SHALL  BE  IMPOSED  AND
 RECOVERED  BY THE DEPARTMENT IN ADMINISTRATIVE PROCEEDINGS. THE ADMINIS-
 TRATIVE PENALTIES IMPOSED ON A REPORTING ENTITY SHALL NOT  EXCEED  FIFTY
 THOUSAND DOLLARS ($50,000) IN A REPORTING YEAR.
 S. 3697--A                          4
 
   B.  IN  IMPOSING  PENALTIES  FOR  A VIOLATION OF THIS SUBDIVISION, THE
 DEPARTMENT SHALL CONSIDER ALL RELEVANT CIRCUMSTANCES, INCLUDING BOTH  OF
 THE FOLLOWING:
   (I) THE VIOLATOR'S PAST AND PRESENT COMPLIANCE WITH THIS SECTION; AND
   (II) WHETHER THE VIOLATOR TOOK GOOD FAITH MEASURES TO COMPLY WITH THIS
 SECTION AND WHEN THOSE MEASURES WERE TAKEN.
   § 2. The state finance law is amended by adding a new section 99-ss to
 read as follows:
   §  99-SS.  CLIMATE-RELATED FINANCIAL RISK DISCLOSURE FUND. 1. THERE IS
 HEREBY ESTABLISHED IN THE JOINT CUSTODY OF THE STATE COMPTROLLER AND THE
 DEPARTMENT OF TAX AND  FINANCE  A  SPECIAL  FUND  TO  BE  KNOWN  AS  THE
 "CLIMATE-RELATED  FINANCIAL  RISK  DISCLOSURE FUND". MONEYS IN THIS FUND
 SHALL BE KEPT SEPARATE AND NOT COMMINGLED WITH ANY OTHER MONEYS  IN  THE
 CUSTODY  OF  THE  COMPTROLLER,  AND  MAY ONLY BE USED IN ACCORDANCE WITH
 SECTION 77-0102 OF THE ENVIRONMENTAL CONSERVATION LAW.
   2. SUCH FUND SHALL CONSIST OF ALL REVENUES RECEIVED BY THE  DEPARTMENT
 OF  TAXATION  AND FINANCE, PURSUANT TO THE PROVISIONS OF SECTION 77-0102
 OF THE ENVIRONMENTAL CONSERVATION LAW AND ALL OTHER MONEYS  CREDITED  OR
 TRANSFERRED  THERETO  FROM  ANY  OTHER  FUND  OR SOURCE PURSUANT TO LAW.
 NOTHING CONTAINED IN THIS SECTION SHALL PREVENT THE STATE FROM RECEIVING
 GRANTS, GIFTS OR BEQUESTS FOR THE PURPOSES OF THE  FUND  AS  DEFINED  IN
 THIS  SECTION  AND  DEPOSITING  THEM INTO THE FUND ACCORDING TO LAW. ANY
 INTEREST RECEIVED BY THE COMPTROLLER  ON  MONEYS  ON  DEPOSIT  SHALL  BE
 RETAINED AND BECOME PART OF THE FUND, UNLESS OTHERWISE DIRECTED BY LAW.
   §  3.  Severability.  If any clause, sentence, paragraph, subdivision,
 section or part of this act shall be adjudged by any court of  competent
 jurisdiction  to  be invalid, such judgment shall not affect, impair, or
 invalidate the remainder thereof, but shall be confined in its operation
 to the clause, sentence, paragraph, subdivision, section or part thereof
 directly involved in the controversy in which such judgment  shall  have
 been rendered. It is hereby declared to be the intent of the legislature
 that  this  act  would have been enacted even if such invalid provisions
 had not been included herein.
   § 4. This act shall take effect on the sixtieth  day  after  it  shall
 have become a law.