New York Joins the Climate Disclosure Party

New York is on the brink of passing its own climate disclosure law (S. 3456A, for legislation nerds) joining California (SB 253) in filling the vacuum left when the SEC shelved its own framework. If your company does business in New York and clears $1 billion in annual revenue, you’re in scope. Rulemaking on the specifics will be handed to the DEC, including building out a public digital disclosure platform.

The timelines are not messing around:

• 2027: Scopes 1 and 2 disclosure begins

• 2028: Scope 3 disclosure begins

• 2031: Third-party assurance requirements tighten considerably for Scopes 1 and 2

The law requires reporting in conformance with the GHG Protocol, which most readers will know well, and companies reporting under IFRS sustainability standards should be able to satisfy the requirements with minimal rework. (If you’re still doing this in Excel, close this tab and call us.)

Who’s Actually Affected

The obvious targets are the large publicly traded REITs and most of the PERE 100, though for private firms it depends on how revenues are structured, since they don’t exactly publish their numbers.

The more interesting zone is the firms hovering near that $1B line. If you’re bouncing around that threshold year to year we recommend building the infrastructure now, waiting to find out whether you’re in scope is not a strategy. And as the big players start publishing, smaller firms that don’t will start looking like they have a risk blind spot. Voluntary disclosure will likely follow.

Parent companies can report on behalf of qualifying subsidiaries, which is a practical relief given how many real estate firms operate through layers of SPVs. The flip side is less clear-cut: the law suggests that if a parent clears the threshold, subsidiaries can't sidestep the obligation, but how revenue is aggregated across corporate structures will likely come down to DEC rulemaking, and that's worth watching closely.

Scopes 1 and 2: Table Stakes

For real estate, Scopes 1 and 2 (direct fuel combustion and purchased energy) are relatively well-trodden ground. If you’re already reporting to GRESB or working toward an ENERGY STAR certification, your data collection is likely in decent shape. The new wrinkle is mandatory third-party assurance, which raises the bar above what most voluntary frameworks require.

2027 is achievable for prepared firms. The question is whether your current data collection processes can hold up under external scrutiny. That’s where having a system that tracks asset-level consumption data, rather than reconstructing it from utility bills at year-end, starts to matter a lot.

Scope 3: The Hard Part

This is where it gets genuinely interesting, especially for real estate. The relevant categories break down roughly as follows:

• Tenant emissions: The big one. Energy used by tenants is obviously a major Scope 3 category, and under triple-net leases landlords often have zero direct visibility into what tenants are consuming. The GHG Protocol allows proxy data and industry averages, which helps, but defensible estimates require methodology, documentation, and ultimately, tenant cooperation.

• Financed emissions: Firms holding real estate debt may need to account for emissions associated with their loan portfolios under Category 15. The methods for measuring and acting on this are still being figured out industry-wide. Financed emissions are genuinely the wild west of sustainability data right now.

The good news: Scope 3 penalties between 2028 and 2031 apply only for not filing, i.e., breaking the law, not for imperfect estimates made in good faith. So the message for 2028 is: submit something reasonable, document your methodology, and iterate.

Green Leases Just Got a Lot More Important

The most practical lever for the tenant emissions problem is green lease provisions that require data sharing. This law will accelerate that trend considerably.  What was previously a nice-to-have in lease negotiations is becoming a compliance necessity. Smaller tenants will push back. Have the conversation anyway, and get it into your lease templates now.

Identifying which assets in your portfolio have the worst tenant energy profiles, and prioritizing green lease renegotiations accordingly, is exactly the kind of targeted intervention that turns a compliance exercise into an actual performance improvement.

A Note for Debt Holders

If you’re on the lending side of real estate, you’re in genuinely new territory. Reporting on the emissions embedded in your loan portfolio is something almost nobody has done well yet, and both the measurement methodologies and the practical levers for acting on the data are still evolving. Get ahead of it now, because it’s coming.

What This Law Is — and Isn’t

Worth saying clearly: this is not a law that requires you to reduce emissions, hit a net zero target, or demonstrate progress against a decarbonization pathway. It’s an investor protection law. It requires the largest players to provide a window into the transition risk in their business. What stakeholders do with that information is up to them.

That said, real estate is uniquely exposed here: fixed assets, long-duration energy use, physical climate risk.  Investors are going to compare your disclosed emissions against CRREM pathways, industry benchmarks, and your competitors. Over time, that pressure is what drives efficiency investment and decarbonization. The disclosure is the mechanism; the market does the rest.

The bill itself can be found here: https://www.nysenate.gov/legislation/bills/2025/S9072/amendment/A