In recent years, U.S. companies have faced increased climate-related risks — both physical risks like wildfire, drought, and flooding and transition risks like changing policy landscapes and shifting consumer preferences — prompting some companies to embrace climate risk assessment and emissions reporting. At the same time, investors, consumers, and other stakeholders are demanding more transparent, comparable information about these growing risks. In response to this call, many jurisdictions, including California and the European Union (EU), have enacted corporate climate-related disclosure requirements.

As federal climate disclosure efforts stall in the U.S., the California and EU reporting regimes offer a timely natural experiment — and lessons for future U.S. policy. The two frameworks reflect distinct legislative approaches. California focuses narrowly on climate-related risks and emissions, aiming to drive transparency for markets and consumers and, ultimately, compel emissions reductions. The EU embeds climate disclosures within a sweeping environmental, social, and governance (ESG) framework, applying a double materiality standard that explicitly requires companies to assess their own environmental impact. These structural differences raise pressing questions: which approach yields more complete and comparable disclosures, and which more effectively shapes corporate and investor decision-making? As reporting data accumulate in the coming years, policymakers have an opportunity to evaluate what works and to apply those lessons to the design of durable federal climate disclosure policy.

This analysis examines the current state of climate disclosure requirements in California and the EU, analyzes early voluntary climate risk reporting in California, and identifies key questions for federal policymakers designing future U.S. climate disclosure policy.