California’s AB-1305 Sets the Standard for Carbon Neutral Transparency

As expectations around climate action and transparency continue to increase, let's dive into one of California’s three main climate change-related reporting requirements: AB-1305 “Voluntary carbon market disclosures.”

AB-1305, which was signed into law in 2023 and effective as of 2025, sets the standard for transparency for carbon offsets and climate-related emissions claims such as “Carbon Neutral.” For an introduction to California’s main climate reporting requirements, see our previous blog post here.

‍

What does AB-1305 require of companies?

AB-1305 requires entities that operate in the state of California and are involved in carbon offsets and carbon neutrality claims to add specific information to their websites. AB-1305 formally sets the standard for companies “doing business” in California but also informally sets best practice expectations across the U.S. Although what qualifies as “doing business” in the state has not been finalized yet, the law outlines specific information to report based on the role a company plays in carbon offsets/climate-related emissions claims through the California Health and Safety Code:

‍

• §44475. An entity markets or sells voluntary carbon offsets
• §44475.1 An entity purchases voluntary offsets and makes climate-related emissions claims
• §44475.2 An entity does not purchase offsets and makes climate-related emissions claims

‍

Why does it matter?

Beyond its formal and legal impact, AB-1305 informally sets best practice standards across the U.S. Expectations around climate action and transparency continue to increase, which ClimateHound sees as a good thing because it increases trust and accountability and helps consumers make more informed decisions. 

‍

ClimateHound makes it easy to meet transparency expectations

Companies who are certified Carbon Neutral through ClimateHound have achieved this certification through calculating their carbon footprint, reducing environmental impact, and funding carbon-negative projects to offset remaining emissions each year – and we provide you with everything to meet transparency expectations (§44475.1).

For each client, we provide a customizable page with your sustainability story, high-level emissions information from your most recent carbon footprint, current initiatives to reduce emissions, and the required details about your carbon offsets to easily embed or link on your website. More specifically, ClimateHound’s sustainability page provides the offset information required for a company to include on their website, which is outlined in section §44475.1:

‍

(a) The name of the business entity selling the offset and the offset registry or program.

(b) The project identification number, if applicable.

(c) The project name as listed in the registry or program, if applicable.

(d) The offset project type, including whether the offsets purchased were derived from a carbon removal, an avoided emission, or a combination of both, and site location.

(e) The specific protocol used to estimate emissions reductions or removal benefits.

(f) Whether there is independent third-party verification of company data and claims listed.

‍

Whether or not you do business in California, incorporating ClimateHound’s automated sustainability page into your company website helps you easily communicate the most up-to-date information, meet best practices for Carbon Neutral transparency, and show environmental leadership to inspire others.