Busy sustainability professionals tell us all the time that figuring out how to buy carbon credits can be overwhelming. With too much already on their plate, they definitely don’t have time to track and worry about how to comply with new legal obligations that require them to report publicly on their carbon credit purchases. 

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With a new free tool from CNaught, they don’t have to. We can help you comply with your obligations under California AB 1305, so you can get back to helping your company decarbonize.

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Wait – there are reporting obligations?

AB 1305 (officially, the Voluntary Carbon Market Disclosures Act) was signed into law in October 2023 and took effect January 1, 2025. The law requires companies that market, sell, purchase, or use voluntary carbon offsets to disclose key details about those projects on their websites. The goal is to bring greater transparency to climate claims and ensure that the carbon credits you purchase actually represent real, verifiable climate benefits.

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Does it apply to me?

The scope of AB 1305 is broad and will likely impact a large number of businesses. Alongside companies like CNaught that market or sell carbon credits in California, the law specifically imposes obligations on companies that operate in the State and:

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1. Buy or use carbon credits and make climate claims (like “net zero” or “carbon neutral”); or
2. Make climate claims, even if they don’t mention carbon credits.

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It’s not totally clear what it means to operate in the State for these purposes, but it is clear that the bill was intended to apply broadly.

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What do I have to do?

Companies required to comply with AB 1305 must disclose key details about their carbon credit purchases on their public website. For those purchasing carbon credits, disclosures must include:

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• Vendor Information
  
  • Name of the business entity selling the carbon credit
  • Carbon credit registry or program 
• Project Details
  
  • Project name, ID, location, and type (e.g., removals vs. avoided emissions)
• Verification & Methodology
  
  • Whether the project is third-party verified
  • The methodology used to calculate the project’s emissions

In addition, companies must disclose how any net-zero or similar climate claims were calculated, measured, and verified.

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What happens if I don’t comply?

You can be subject to fines of up to $2,500 per day, per violation, capped at $500,000.

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How CNaught helps

Our mission is to make your carbon credit journey easy. That’s why we’ve created a free tool that anyone can use to generate a report that meets the requirements of AB 1305 for carbon credit purchases. You can link to the report from your website, and it will automatically update when you add new purchases. That means, once you add the link to your website, you never have to touch it again.

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All you have to do is enter a few basic project details or upload your supporting documents directly. Try it out for yourself: https://www.cnaught.com/ab1305-report.

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Disclaimer: While I’m actually a lawyer, I’m not your lawyer, and this isn’t legal advice. If you have legal questions about complying with AB 1305 or any other law, you should consult with an attorney.