Meeting CA 253/261 requirements using Microsoft Cloud for Sustainability

By - January 21, 2025

There are several reasons for your company to prioritize sustainability—whether it’s to enhance brand reputation, identify cost-reduction opportunities, or comply with regulations. Regardless of the motivation, your company will need a solution to meet these sustainability goals. In the U.S., companies can face various regulatory requirements, with two of the most pressing being CA SB 253 and CA SB 261, which mandate reporting in 2026 based on 2025 data.

CA SB 253 requires public and private companies doing business in California to report Scope 1, Scope 2, and Scope 3 emissions from their operations. This requirement primarily applies to companies with annual gross revenues exceeding $1 billion.

CA SB 261 mandates that publicly traded and large private companies with more than $500 million in annual revenue report their climate-related financial risks. This includes exposure to climate change impacts and strategies for mitigating these risks. As part of this requirement, companies must also report the same emissions data outlined in CA SB 253.

It’s important to note that even if your company doesn’t directly meet these thresholds, you may still be required to provide data from partners or suppliers who are subject to these regulations.

Microsoft provides powerful tools to help organizations achieve their sustainability objectives, improve their ESG performance, and accurately calculate their greenhouse gas emissions, ensuring compliance with regulatory requirements like CA SB 253 and CA SB 261.

 

Overview of Microsoft’s Cloud for Sustainability

Microsoft’s Cloud for Sustainability is a comprehensive suite of tools designed to help organizations manage their environmental impact and prepare for regulations. It aims to unify data intelligence and provide integrated, automated sustainability management. The platform includes various features that enables businesses to track and reduce their environmental footprint, thereby improving their ESG performance and meeting evolving stakeholder expectations.

Key Features:

  • Data Unification: The platform unifies data for various sources, breaking down silos and providing a single source of truth for sustainability metrics. This helps organizations gain a holistic view of their environmental impact.
  • Automated Reporting: Microsoft Sustainability Manager automates the reporting process, making it easier to track and report on sustainability metrics. This includes emissions, water usage, and waste management, ensuring compliance with regulatory requirements and sustainability standards.
  • Advanced Analytics and Insights: The platform leverages AI and advanced analytics to provide actionable insights. Organizations can analyze their sustainability data to identify trends, assess performance, and make data-driven decisions to improve their ESG outcomes.
  • Integration with Business Systems: The platform integrates with existing business systems, such as ERP and CRM, to enhance data accuracy and streamline workflows. This integration ensures that sustainability data is embedded into everyday business processes.
  • Scenario Planning: Organizations can create different scenarios to visualize and assess the impact of various sustainability strategies. This helps in planning and implementing effective measures to reduce environmental footprint.
  • Environmental Credit Service: This feature supports the management and trading of carbon credits, helping organizations offset their emissions and achieve their sustainability goals.

 

Microsoft Sustainability Manager

The Microsoft Sustainability Manager is a comprehensive solution within the Cloud for Sustainability, designed to assist organizations in managing and achieving their Environmental, Social, and Governance (ESG) objectives. It provides a suite of features that simplify sustainability management by unifying data, automating reporting processes, and integrating seamlessly with existing business systems. Additionally, the platform enables the calculation of greenhouse gas (GHG) emissions, helping organizations track their carbon footprint across Scope 1, Scope 2, and Scope 3 emissions.

For enhanced customization, you can extend the core capabilities of the Sustainability Manager using Azure and Power Platform tools, allowing you to develop tailored solutions, such as custom formulas, detailed reports, and tailored sustainability metrics.

 

What’s Next?

As sustainability and ESG performance become increasingly important, adopting advanced tools like Microsoft’s Cloud for Sustainability and the Microsoft Sustainability Manager will be crucial for organizations.

Explore Microsoft’s Cloud for Sustainability and discover how it can transform your organization’s approach to sustainability and ESG performance. If you have any questions, feel free to reach out!

Andrei is a Business and Technology professional specialized in delivering curated Microsoft D365 CE, Power Platform, and Sustainability solutions. His work involves designing and implementing systems that enhance business operations and improve business processes and workflows. Additionally, Andrei is a part of RSM’s Microsoft Sustainability Manager service team that supports organizations reduce their carbon footprint, monetize carbon reductions, and meet regulatory requirements.

Contact our team to learn more!

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