Counting Carbon and Pricing Risk

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Sara Gutterman: Welcome to The Valuation Metric, a podcast about the risks, rewards, roadblocks and revelations reshaping the way that we measure worth. I'm your host, Sara Gutterman, CEO of Green Builder Media, North America's leading media company focused on green building and sustainable living. California's SB 253, the Climate Corporate Data Accountability Act, is targeted at companies that generate more than $1 billion of business in the state, recognizing that their greenhouse gas emissions are no longer an abstraction and that they should be a reportable fact.

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Sara Gutterman: Because the moment that you measure and emission, something quietly radical happens. A thing that used to be an externality, invisible somebody else's problem. Later down the road, it actually becomes a number and numbers get audited, numbers get disclosed, numbers get compared and financed and eventually priced. Measurement is the first act of what we like to call on this podcast honest valuation.

00:01:12:00 - 00:01:41:10
Sara Gutterman: You can't reprice what you are, what you refuse to count. In late June, the California Air Resources Board pushed the first SB 253 emissions reporting deadline from August 10th to November 10th, 2026, and pulled its proposed rules back for limited changes in quotes. The reflex across corporate America was relief. But here's the thing about the meter it runs.

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Sara Gutterman: Whether or not you're reading it, the emissions happened. The exposure is real. The only question the delay actually changes is whether you spend the next 90 days building the machinery to tell the truth, or 90 days finding yourself in exactly the same spot in November that you're in today. Now, my guest today is intricately involved in carbon accounting and measurement and knows a lot about what just happened as California blinked.

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Sara Gutterman: Jay Ruckelshaus is the co-founder and head of partnerships and policy at gravity, an enterprise carbon accounting and energy management platform. And he's here to help us understand the importance of carbon accounting. The impact of the delay of SB 253 and the long term game and gains. Hello, Jay. Welcome.

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Jay Ruckelshaus: Thanks, Sara. Pleasure to be here.

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Sara Gutterman: So let's ground everybody first in clean English. What exactly did Carb do in late June and who does. SB 253 actually apply to give us the version of CFO who's been ignoring this or really needs to hear.

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Jay Ruckelshaus: Yeah, I think it's a great place to start, because there's often so much jargon in this space and kind of our internal. So just with the basics, as you said, California Senate Bill 253 requires large companies really headquartered anywhere in the US, as long as they're doing some meaningful business in California and have overall $1 billion in revenue per year to disclose every year, they're being house gas emissions.

00:03:13:12 - 00:03:36:10
Jay Ruckelshaus: And it's really the biggest, most important sustainability disclosure regulation in a generation in the US. And I think importantly for the CFO audience is a kind of brings what used to be maybe more the province of marketing or kind of a nice CSR responsibility report that a company would put out once a year really much more into language in terms that they'll be familiar with.

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Jay Ruckelshaus: There's an audit requirement that ramps up next year and essentially mandates companies report emissions with the rigor with which they report financials. And given these new rules, it's been, you know, a pretty broad process of refinement that the California Resources Board has been going with to make sure that they rule them out appropriately, seeking a lot of public feedback along the way on how they'll be operationalized, working their way to your to your specific question, as you called out in just a couple of weeks ago in June, the Carb agency did defer the deadline that was initially going to be in August till November.

00:04:14:03 - 00:04:39:18
Jay Ruckelshaus: While they proposed some limited changes, the jury's out. They haven't yet specified what those clarifications will be. I think money is on them being fairly limited, kind of technical matters of refinement rather than anything hugely dramatic or sweeping given their only proposing a 15 day comment period. But it's just the latest development and what's been a couple of years unfurling, preparing for this pretty big regulation to come into force.

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Sara Gutterman: Read the tea leaves for me. Is this delay a sign that the rulemaking is wobbling or a sign that it's evolving, or they just want to get it right? What does it mean?

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Jay Ruckelshaus: I think no sign of wobbling more. Just clarification, but it is a little bit of a double edged sword for companies. Honestly. I you know, we work at gravity with hundreds of enterprises who are subject to this. And on the one hand, there is a modicum of comfort with we get a little bit of an additional, you know, wiggle room, a little bit additional cushion of time.

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Jay Ruckelshaus: But it does introduce some new uncertainty because we don't know what these changes are. Clarifications will be, and there are still pretty major outstanding substantive matters of interpretation. That card has been, you know, silent on so far, including even things like the format of the submission and next year, what the addition of value chain measurement will will look like.

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Jay Ruckelshaus: I know we'll probably get on to that later in the conversation. But, you know, on the one hand, additional room, but on the other hand, some major questions that we're hoping they're going to provide some clarity on.

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Sara Gutterman: Three months. That kind of feels like a rounding error as opposed to a meaningful amount of time. So what does this mean for companies that have genuinely been doing the work on understanding scope one and scope two and scope three emissions, especially in light of what you just said, that nobody really knows what those, quote, limited changes look like.

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Sara Gutterman: And then how does that answer change for a company that's kind of behind the eight ball and hasn't really started its three months enough for them to actually prepare a strategy?

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Jay Ruckelshaus: Yeah. The great question, because companies really are all over the map when it comes to their preparation. Many companies have been measuring their greenhouse gas emissions and sustainability metrics and risks for years, even decades. Usually their first requirement to do so. And I think for those companies that have seen this coming that have something in place, it really is a rounding error.

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Jay Ruckelshaus: And I don't anticipate a really having too much of effect on them. Of course, with the asterisk of we'll see what the what the clarifications are. If they have to do with things like formatting the actual submission, then they may introduce, yeah, a little bit of a little bit of a scramble to make sure they're going to be ready for that November revised deadline.

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Jay Ruckelshaus: But I think if a company hasn't started yet or is still kind of in the thick of the process, which again, there are companies in that category, it's a potential game changer. I mean, definitely doable to knock out a scope one and two footprint, as we call it, in a couple of weeks with technology today, when I say scope one and two, I know not everyone's kind of as deep in the realm of carbon accounting maybe as we are.

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Jay Ruckelshaus: So what Carb is requiring for this first deadline is measuring the emissions associated with the company's own energy usage. So the fuels they purchase, gas they're burning on a construction site, you know, electricity then for scope two and acquired energy. So everything with their own operations, they don't yet have to account for value chain customer usage until until next year.

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Jay Ruckelshaus: But that will be a big a big step up for sure.

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Sara Gutterman: And how ready. Do you think companies are given that you just said that they're all over the map, but how ready? Do you think companies are really are to measure and report on scope three emissions, which is really important because scope three is everything outside of your company. As you just said, it can be up to 80% of, you know, your full emissions report for a large company.

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Sara Gutterman: Do you feel like companies have a reasonable grasp on scope three at this point, or are they going to need every single minute between now and when those are going to be required to be reported on in 2027?

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Jay Ruckelshaus: Yeah, I think all of the above, you know, sound like really, again, really sophisticated. They've been measuring scope three for years, both upstream emissions from the materials you're purchasing and business travel you're purchasing employee commuting even to downstream categories like leases and franchises and downstream transportation. So it really is a whole heterogeneous bucket. And I think that speaks to like some companies, even if they haven't mastered everything yet, maybe they've been measuring 1 or 2 of those categories or doing so in a high level kind of initial hotspot analysis kind of way.

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Jay Ruckelshaus: I think the devil gets very much quickly into the details of making sure you've got comprehensive coverage across your go. Three footprint, the value chain footprint, and a reasonable amount of data integrity and quality. And that does differ by category. You know, a lot of companies may not know exactly how their customers use their products if they're selling kind of intermediate products.

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Jay Ruckelshaus: So they had to make high level estimates and getting from that to end the sacrament over that scope three in time and the years to come will be something that companies will need to work toward.

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Sara Gutterman: We do you think that this delay and the limited changes are for curb to make the reporting less burdensome?

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Jay Ruckelshaus: I it's possible they have been to their credit kind of in all the public sessions they've held, all the feedback they've accepted. I mean, companies have been very clear that for many of them, this is just an entirely new world. And so CART has explicitly in their justification for certain changes. And certainly this, this pushback, our, our, our team to make sure companies understand, they hear and we hear you, you know, they want to know that there are mechanisms in place to make this a bit easier for the first year.

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Jay Ruckelshaus: That's why one of the reasons why scope three isn't required until next year, the second year of reporting. They did push back that assurance requirement, which originally everyone thought would apply this year, but limited assurance on those numbers won't be required until next year. So there's certainly aware of the kind of task at hand for companies. I think it's it remains to be seen whether this initial or this last clarification will be a question of of making that reporting burden easier versus something more clerical.

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Jay Ruckelshaus: It'll be interesting to watch in the next couple of weeks.

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Sara Gutterman: So on this podcast, the valuation metric, we argue that valuation is downstream of measurement and that you can't honestly price what you've never counted. So given that our corporate emissions and corporate emissions accounting, is that an accounting problem or is it a values problem? Wearing an accounting costume will say.

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Jay Ruckelshaus: Having fun picturing an accounting costume at Halloween and what the heck?

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Sara Gutterman: Yeah, I'm giving you good ideas.

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Jay Ruckelshaus: I got I think.

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Sara Gutterman: It's interesting to write. I guess you become the bigger you know.

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Jay Ruckelshaus: Or molecules in there. Yeah. To think about it, I think it's interesting. It's a very similar freezing in a really a central tenet of environmental data for a long time that you can't manage what you don't measure. It's really the foundational principle of the GHG protocol, which is kind of the rulebook or methodology Bible that undergirds all of this kind of scope, language and what counts.

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Jay Ruckelshaus: And I think the temptation is often very widespread to treat reporting or disclosure as an accounting exercise. Counting will be purchased in terms of gallons of fuel, kilowatt hours of electricity. But the reality is, like all of that data is the same data you need to size and to qualify different value. Creating projects at a company called blaze, energy consumption is often really hard to keep track of, and it's a massive meters and sites and kind of leaves a lot of low hanging fruit.

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Jay Ruckelshaus: Still unplugged about energy efficiency projects, energy consumption saving projects, things that reduce emissions but also reduce costs and energy and even no regrets moves like LED lighting and HVAC upgrades and optimization, and certain kinds of battery usage and fleet electrification, like all of these, are really pencil out and have this very strong business case, low payback period, but are still interestingly under adopted.

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Jay Ruckelshaus: And one of the real benefits of emissions reporting and carbon accounting is that you kind of get the initial data underway to actually pre-qualify those kind of projects. And that's a really big part of what we're up to at gravity is, yes, the disclosure, but repurposing the disclosure to actually drive business value while energy costs are skyrocketing. So that potential has always been there.

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Jay Ruckelshaus: But I do think it's true. Like the sustainability reporting obligations stacking up on companies often has led to more of yeah, just an accounting for accounting sake mindset. Maybe because they're drowning in data, they don't have the time or or the tools yet to to actually make real the benefits of the data. But I think so. Yeah, there's the potential for it to be more of that value creating opportunity.

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Jay Ruckelshaus: But we need to get out of the yeah, I guess the costume version of it.

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Sara Gutterman: You use the word defensible, which I love because it imports an actuarial mindset into a conversation that can sometimes just run on by. And so what makes an emissions number defensible, and how far is the average company from being able to actually defend theirs?

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Jay Ruckelshaus: Yeah, that's a great question. Especially for more the financial audience and those coming up from from business backgrounds, because it is it is a new topic often for them. So there's there's really a few components of any emissions calculation. So the first is what we call activity data, which is essentially some business process or purchase. So a gallon of fuel, you know, 10,000 kilowatt hours of electricity a month or something like that.

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Jay Ruckelshaus: And the defense ability aspect there comes in because, I mean, all of those data points need proof and evidence. They need utility bills backing them up or AP records or any other kind of business controls that are capturing the comprehensiveness that you've actually collected all of that, and you're not just forgetting about a couple of sites and somewhere else and all the electricity usage there and the evidence around that.

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Jay Ruckelshaus: So activity itself has to have a certain standard of evidence met. And then you typically multiply that activity data by what we call an emission factor, which is kind of like a conversion of one unit of that activity data into greenhouse gas emissions. So for electricity, sticking with that example, we know what the cleanliness of and the energy intensity is of the different regional grids in the US and globally to typically want to find an emission factor for that electricity consumption that's matched on a time basis and on a, on a regional basis.

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Jay Ruckelshaus: And so the selection of that emission factor is also a matter of defense ability for the assurance providers who are going to come in and comb this over and in more detail than, you know, you can believe. And so finding the one that's the closest match and that's the important defensible aspect there. And then maybe rounding out there are then just kind of like more general company wide policies and controls about personnel.

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Jay Ruckelshaus: And how are you making sure that your unit conversions and currency conversions of those are applicable and a whole host of other issues kind of come into play? And again, kind of companies are all over the map here. Some have never contemplated measurement, let alone assurance. And so I think it's important to really make the foundations good ones, that you can follow calculations.

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Jay Ruckelshaus: And the auditability becomes really almost more important than the actual numbers themselves, is the process.

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Sara Gutterman: Thank you. That's fascinating. Let's stick with the topic of carbon accounting for a couple more questions. Financial accounting was engineered to answer one question what do we earn this quarter? Whereas carbon accounting asks a completely different question, which really is what did we borrow from the future? How are we impacting the future? So there's kind of seems to be a fundamental disconnect between our current financial accounting system and what we're asking companies to do with carbon accounting.

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Sara Gutterman: So how do you reconcile kind of the the short term versus the long term ledger there? And, you know, can our current system really hold the weight of that much longer term vision?

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Jay Ruckelshaus: Yeah, it's such an important really the crux of the whole the whole issue. Right. And I think I do think that I mean, there's of course tons of differences between financial accounting and carbon accounting, but but there may not be as far apart as they, they seem maybe for for two reasons. One, we've covered, which is more about the kind of evidentiary basis of them, and standards around assurance provision and governance and controls.

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Jay Ruckelshaus: And really the rise of a whole new ESG controller ship effectively like function within companies often reporting to finance, but not only designed, designed to to control the integrity of the measurement process, similar to financial accounting. But I think what's really interesting is like at the end of the day, both are ultimately hopefully best served by contributing to real business value.

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Jay Ruckelshaus: That's forward looking. And so financial accounting, yes, understanding retroactively, but also supporting investment decisions and whole host of other business business insights and analytics. And I think that's the the real hope for carbon accounting and sustainability disclosure more generally, as always. Yes. Well, that this information will yield transparent transparency toward ideally an end that matters and that encourages actions that are beneficial for both the businesses and the environment.

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Jay Ruckelshaus: But, I mean, maybe back to the thread a moment ago that that promise isn't always realized. Today, I think we are in an era when accounting for emissions and other forms of sustainability disclosure can risk just becoming a measurement merry go round that, like companies measure, you know, in the first quarter of the year and got their pretty sustainability report out there and are just so bogged down in data collection that they immediately have to start measuring again for the next year.

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Jay Ruckelshaus: And it just becomes this kind of endless cycle, that kind of thing. Nobody got in the business for, you know, nine times out of ten. And somebody didn't just want to make reports with their with their career. And so I think breaking out of that with better tools and by again realizing the underlying latent potential of that data to actually drive synthesis value is so important both for the business value itself, but also for like the legitimacy of regulations like this one, I think.

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Sara Gutterman: Interesting I have I've been in the sustainable business sector, let's say, for my entire career. First in venture capital, we I was with a mid-sized fund and we invested in, well, telecom infrastructure and biotech. But we were in Boulder, Colorado. So we invested in some organic foods and natural retail products, which you know very well, some of which you would never have heard of because that's how venture capital is.

00:19:43:01 - 00:20:15:18
Sara Gutterman: And then for now, 21 years with Green Builder Media. And of course, we've seen all kinds of ebbs and flows and political headwinds and tailwinds. We saw a surge in focus on ESG and ESG focused funds and investments. You know, during, let's say, the Obama and the Biden administration's obviously, during the Trump administration, there have been significant headwinds for any kind of sustainable business initiative, let's call it.

00:20:15:18 - 00:20:53:14
Sara Gutterman: And so what we've actually seen is that, you know, let's say ESG investing or impact investing hasn't gone away by any means. It's just evolved. And so now people talk about it with respect to risk reduction and bolstering supply chains and, you know, accessing critical materials like, you know, rare earth minerals and being able to bolster companies from any kind of shock, whether it's a climate event or a war that's going to close the Strait of Hormuz or, you know, any anything along those lines.

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Sara Gutterman: So there's a lot of risk reduction conversation. How does herb an accounting specifically at this point play into that CFO mindset with respect to reducing risk, enhancing sales, generating greater customer and employee loyalty? You know what? How are these benefits these maybe more kind of.

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Sara Gutterman: Quantitative qualitative benefits? How are they being quantified on spreadsheets at this point?

00:21:29:20 - 00:21:58:05
Jay Ruckelshaus: Yeah, it's such a great question. Maybe I'll offer like my personal take on it too, because I really appreciate, yeah, the wisdom you've earned in this sector and related sectors. And then maybe more specifically answer your question. But, I mean, I studied polarization in a prior life. I used to be an academic focused on how to people on the left and the right in Western countries think about issues like climate that are deeply politicized, but that politicization often masks, at the end of the day, like pretty common desires and aspirations.

00:21:58:05 - 00:22:28:19
Jay Ruckelshaus: And how does the language maybe sometimes distract us from that more personally even than that? I mean, look, I'm from Indiana. Most of my family are Republicans. Like, it was very clear to my co-founder, who's also from Indiana, when we were starting gravity, like we always wanted to build a business that did right for the world, helped the environment, but didn't alienate the 90% of the economy that's often still sitting on the sidelines here in industries that we grew up around, like industrials, construction, manufacturing, building materials.

00:22:28:19 - 00:22:49:21
Jay Ruckelshaus: In our way to do so is really to tap into this connection between the carbon accounting piece, the reporting piece, but also the energy piece and the efficiency piece, because the I mean, good and bad news, the the good news is there are still so many levers out there that companies can act on that reduce both at the same time, that are no brainer business cases.

00:22:49:21 - 00:23:13:18
Jay Ruckelshaus: Any CFO would dream of the payback period and the and the return while also reducing emissions. And companies are often just way too busy to to act on these and that they really are often not. Not the rocket science silver bullet ones, but things around energy efficiency, fuel optimization, that kind of thing. So we always wanted to build a platform that spoke to both language, both languages.

00:23:13:20 - 00:23:45:06
Jay Ruckelshaus: And I think that maybe we got more specifically machine learning to come in specifically. It's really that energy. And I think that's been so and again, macro headwinds there is that energy costs are that access to energy is no longer nearly as is it often tied to. In previous decades, commercial and industrial energy cost up 10% year over year, which is saying it is now more of a board level concern that has been in my lifetime.

00:23:45:06 - 00:24:00:21
Jay Ruckelshaus: And so we're often just knocking on open doors when we talk to leaders, something that is spending and the abilities. One angle of that, but it's not the only thing and sometimes one.

00:24:00:23 - 00:24:29:18
Sara Gutterman: Interesting now, in the green building space, we like to say that California is really the harbinger for everything. And they kind of have this way of setting the national or raising the floor nationally almost by accident. You know, first, it was a mission, Anders appliance standards and now this, you know, so do you think that SB 253 is effectively writing a disclosure standard for the whole country and maybe even beyond?

00:24:29:20 - 00:24:43:14
Sara Gutterman: So, you know, what should people in Indiana or where I am, Colorado or Texas or Ohio or New York understand about the future impact of what's happening right now in California?

00:24:43:16 - 00:25:01:12
Jay Ruckelshaus: Yeah, it's a great question. And as you know, it's a well worn path of kind of stretching back to the latter half of the 20th century in California policy, both because it's a huge market and because of the yang of American politics. When the federal government goes one way, the states co and other often. And I think this is a good example of that, and I think it's absolutely playing out now.

00:25:01:13 - 00:25:25:12
Jay Ruckelshaus: I mean, one thing to note is whether companies are headquartered in California or not is irrelevant to their their applicability here. And as long as they meet the specific threshold and the amount of business being done there, they're going to be subject to this, to those regulations. It already does kind of creep out outwards, but probably more specific or more significantly, other states have been following the lead here.

00:25:25:12 - 00:25:49:12
Jay Ruckelshaus: So New York, Illinois, a couple of others. I think Colorado actually, definitely New York and Illinois have had pretty significant advancements in their own state houses and legislative processes of very similar regulations. So they call anticipate kind of a similar spread. Their it's worth noting as well that a lot of the biggest companies who fall under this regulation often have global operations that fall under global regulations.

00:25:49:12 - 00:26:14:11
Jay Ruckelshaus: So the CC'd is a huge rule in the European Union that many American companies fall under already, too. And maybe last thing I'll say is, besides this kind of law, regulatory pressure to disclose emissions, there's a lot of kind of quasi regulatory pressure. Many investors, and as a requirement to access to capital require this sort of information. Other stakeholders are demanding it.

00:26:14:11 - 00:26:21:13
Jay Ruckelshaus: So I think that the genie is kind of out of the bottle, and it's more just about how do we do it efficiently and in a way that provides value.

00:26:21:15 - 00:26:51:02
Sara Gutterman: Let's talk about those stakeholders, because obviously lending markets, investors, etc. are pivotal to the way of of our economic system. Do you see that they are recognizing companies that have carbon accounting in place at a higher value and valuation at this point, or has that not been realized yet?

00:26:51:04 - 00:27:12:07
Jay Ruckelshaus: That's a great question. I mean, it often is. Sometimes it's black and white. You know, sometimes it's work with private equity firms. We work with other financial institutions, lenders and otherwise who it's just a requirement. Like it's not even a you know, it's not a choice. Others it is a bit grayer and it is maybe a boost in their own valuation scheme or how they think about exit multiples.

00:27:12:07 - 00:27:49:22
Jay Ruckelshaus: There's been a lot of academic work showing the positive correlation between sustainability interventions, energy efficiency and otherwise, and X and multiples. So there's definitely evidence there. So I think it's starting to be priced in. I think what's kind of maybe a healthy implication of kind of the new, let's say political environment where any kind of scrutiny around the prior wave of kind of everybody's setting zero, you know, everybody publishing ESG report without the potentially the nuts and bolts of understanding of how they're going to reach those targets is that, you know, it's often not just, yes, okay.

00:27:49:23 - 00:28:15:19
Jay Ruckelshaus: They check the box, they did carbon accounting, but actually how are they operationalizing insights from that kind of accounting exercise. How are they embedding the sustainability function throughout the company and thinking about value creation more proactively. And so I think there's a little bit of a healthy just inevitable maturation around yes, disclosure okay. We did that. But like really what does that amount to from a shareholder value perspective and pricing that in appropriately.

00:28:15:22 - 00:28:17:15
Jay Ruckelshaus: Hopefully that's the next frontier I think.

00:28:17:18 - 00:28:55:02
Sara Gutterman: Yeah. So how much do you think that the evolution of carbon accounting is going to be driven by regulation and a market push versus a market pull by the various stakeholders like lenders, investors and ultimately consumers and buyers. I know our mission smart data shows that across the board, every generation, they want to buy products and homes from companies that have a positive environmental impact and social impact.

00:28:55:02 - 00:29:15:13
Sara Gutterman: And carbon accounting is more and more becoming part of that. So what does that push pull dynamic look to you? Is this really only going to be adopted in mass because of the push of regulation, or will the pull of market demand again among the various different stakeholders will that will that? Yeah.

00:29:15:15 - 00:29:35:02
Jay Ruckelshaus: Yeah, I think it's definitely both for the reasons you very well articulated. I think maybe one way of describing behind the curtain how we often see that and manifest that kind of like sequencing of, of pressures or prioritizing of motivations for doing this work in companies is like the regulatory side is often the remit of the compliance folks entirely.

00:29:35:02 - 00:30:09:16
Jay Ruckelshaus: The risk team, the CFO team, the financial reporting team often takes the non-financial reporting kind of mantle. So there's that like constituency within companies who respond to that. But but then very interestingly, like there's often entirely different constituencies that respond to more of that pull, whether it's market intelligence folks, business development teams, category managers and procurement, like if you're working with other stakeholders or companies, if you report to if you sell to Walmart or you sell to Amazon, like they have very robust supply chain requirements now of their suppliers to measure emissions.

00:30:09:16 - 00:30:34:16
Jay Ruckelshaus: And so there's there's quite a bit of interest in that kind of like nontraditional compliance functions within companies that respond to that set of motivations in a way that I think ultimately makes it much stickier. If you've got ten departments at a company saying like, yeah, well, we better get a handle on this. Otherwise we've got some serious trouble, maybe for different reasons, but that's what makes it, I think, in enduring kind of fact of doing business in the 21st century.

00:30:34:18 - 00:30:55:22
Sara Gutterman: So I have a two part question. The first is if you're giving advice to companies that are already fairly far down the path, they're feeling pretty prepared, but they're just kind of scratching their heads saying, okay, I'm not quite sure what's happening with this 30 day or the three month delay period. And these, quote, limited changes, like, what should I be thinking about?

00:30:55:22 - 00:31:12:00
Sara Gutterman: So what would you say to them? And then what would you also say to companies that are really quite unprepared, whether they're in California or not? What are the things that they really need to start paying attention to? And and how do they start on this journey?

00:31:12:02 - 00:31:33:17
Jay Ruckelshaus: Yeah, maybe in reverse order if I could. For those who are just getting started, I think it sounds very basic and obvious, but like, make sure there's an owner and like a point person. I think sometimes when we see these things go awry, it becomes a hot potato that gets thrown from marketing to compliance, to finance to whatever else.

00:31:33:17 - 00:31:54:21
Jay Ruckelshaus: And if they haven't been doing this work before, they may not have a sustainability team or a title. And that's okay. Like that can absolutely be a very streamlined process without a chief sustainability officer or somebody with a sustainability in their title, but just make sure there is that clear ownership. Again, sounds obvious, but we see we see the Tayto being thrown around sometimes.

00:31:55:00 - 00:32:18:05
Jay Ruckelshaus: And I'd say also just like you're not alone, like this has been a practice going on for decades. Stand on the shoulders of giants, leverage the lessons and and efficiency technologies out there and tools that can help with the data, but also the efficiency strategy to those who yeah, to those who are pretty prepared, I'd say. I'd say pay close attention to what the actual clarifications are.

00:32:18:06 - 00:32:41:06
Jay Ruckelshaus: That car provides both for the letter of the law of like. Of course, it'll be interesting to to see what they share in terms of, in terms of the actual technical proposal, but also the evolution of thinking from Carb has been very interesting. And we talked a while back about how they, you know, they're clearly aware of of the magnitude of this effect of the rule on businesses that they're trying to be conscious of.

00:32:41:06 - 00:33:04:16
Jay Ruckelshaus: But at the same time, there's a whole other constituency pushing the other direction, saying, don't go far enough, you know? And so be interesting to see how a cart continually kind of navigates that of their own stakeholder, you know, feedback process. And it's it's a really hard job. I think, you know, certainly business leaders are often have been frustrated with with the, with the rule promulgation process.

00:33:04:16 - 00:33:11:15
Jay Ruckelshaus: But, I mean, I have a lot of sympathy that I think they're doing the best they can in a tough, tough role. And we'll see where they where they shake out.

00:33:11:18 - 00:33:28:12
Sara Gutterman: Yeah. All right. And Jay, my final question to you is what's one specific thing that our listeners, whether they're business leaders, building professionals, consumers, what's one thing that they can do today that would fundamentally change how they think about value.

00:33:28:14 - 00:33:32:21
Jay Ruckelshaus: Oh.

00:33:32:23 - 00:33:56:07
Jay Ruckelshaus: I'll maybe like a very specific just because like man values. That's such a great question and helpful frame across so many aspects of a business. Maybe I'll just say like read a utility bill, whether it's your own like residential consumer bill that you get in there or like ideally maybe your business utility bills like ask someone from accounts payable, ask someone in the energy department and look at it.

00:33:56:07 - 00:34:19:06
Jay Ruckelshaus: Try to understand what it's telling you about your energy consumption. Nine times out of ten, like the listener will find it confusing, frankly, like they're often there's no set structure to them. They all look different across utility providers. Utilities don't always make it easy to understand what's going on, and often there are errors, you know, ton of times, rate optimization or even clerical errors.

00:34:19:06 - 00:34:36:02
Jay Ruckelshaus: These things happen all the time. And so I'd say getting an appreciation for, for this wide, sometimes like diffuse world of energy and sustainability and through something really concrete like what did we draw from the grid last month and how is that communicated to me? And what might it tell me about insights that I could use in my business?

00:34:36:03 - 00:34:38:21
Jay Ruckelshaus: Could be an interesting start.

00:34:38:23 - 00:34:49:05
Sara Gutterman: That's great. Thank you. And what's the best way for people to track what's happening with SB 253 and other carbon accounting requirements?

00:34:49:07 - 00:34:58:21
Jay Ruckelshaus: Yeah. So they have a newsletter I recommend subscribing to just on the card website. They're not very communicative with it, to be honest. It's really only when there's something big. So that's one option.

00:34:58:23 - 00:35:02:21
Sara Gutterman: Selfish on that on that list.

00:35:02:23 - 00:35:11:08
Jay Ruckelshaus: I also post updates kind of unpacking it on my LinkedIn, so that's always an option. But I think I think we should have some more clarity hopefully next couple of weeks.

00:35:11:12 - 00:35:46:09
Sara Gutterman: Wonderful. Well J. Thank you so much for your insights. Hopefully we can have you on again once we have a little more clarity about what is happening. And then we can talk some more about how companies and business leaders can really stay ahead of the game. I learned a lot today. Really appreciate it. To everyone listening. If this episode reframed something for you, please share it with your others and your organization, your friends, your colleagues, your family, especially the people who are going to have to own those emissions numbers or who should be thinking about this.

00:35:46:09 - 00:35:55:11
Sara Gutterman: So thank you again for joining the valuation metric. I'm Sara Gutmann, and if we count honestly then we can build a better world. See you next time.

00:35:55:12 - 00:36:08:01
Melina Mirza: Where you go download them, subscribe to the podcast wherever you get your podcast. And for daily coverage on sustainability, housing and the future of home building, visit Greenville. That's where we're tracking the trends and shaping what comes next.