Company: CVBF
Filing Date: 2025-04-08
Form Type: DEF 14A
Source: 0000950170-25-051966
Chunk: 21

Company: CVB FINANCIAL CORP
Filing Date: 2025-04-08
Form: DEF 14A
Chunk 21
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 SEC voted to end its legal defense of such rules.

On October 7, 2023, the State of California enacted two climate-related reporting statutes, SB 253 and SB 261. SB 253 will require certain corporations and other entities doing business in California with total annual revenues over $1 billion to make public disclosures of their Scope 1 and 2 greenhouse gas emissions, as well as an additional category of Scope 3 greenhouse gas emissions (indirect greenhouse gas emissions not included in Scope 2 emissions which occur in the upstream and downstream activities of the reporting company’s business activities). SB 261 will require certain corporations and other entities doing business in California with total annual revenues over $500 million to report, on a biennial basis, their “climate-related financial risks” and their efforts to address such risks. Currently, we believe that, under the standards likely to be applied regarding the calculation of an entity’s total annual revenues, the Company will be subject to SB 261 but not SB 253, although this could change prior to the initial compliance deadline of January 1, 2026. Under SB 261, “climate-related financial risks” are defined to mean material risks of harm to immediate and long-term financial outcomes due to physical and transition risks, including, but not limited to, risks to corporate operations, provision of goods and services, supply chains, employee health and safety, capital and financial investments, institutional investments, financial standing of loan recipients and borrowers, shareholder value, consumer demand, and financial markets and economic health. The legislative findings supporting this statute describe climate change-related impacts as including wildfires, sea level rise, extreme weather events and droughts.

Additionally, on October 24, 2023, the U.S. federal banking regulators finalized interagency principles for the effective management and supervision of climate-related financial risks (the “Climate Principles”). The Climate Principles are formally targeted at larger banking organizations, with total assets in excess of $100 billion, and are intended to convey consistent supervisory expectations regarding how climate-related financial risks should be managed by financial institutions. More specifically, the Climate Principles are intended to support efforts by larger financial institutions to focus on key aspects of climate-related financial risk management, including through their governance; policies, procedures, and lending limits; strategic planning; risk management; data, risk measurement and reporting; and scenario analysis. Additionally, the Climate Principles describe how climate-related financial risks can be addressed via management of traditional risk areas, including credit, market, liquidity, operational, and legal risks. Although the