--- title: States Are Powering Sustainability and Moving Climate Regs Forward description: States are proving that climate action can continue through regulation, regional coordination, and market design. image: https://pages.thirdeconomy.com/hubfs/activism%20defence%20link%20graphic%20with%20logo.jpg --- [![Third-Economy-logo-horizontal-1](https://pages.thirdeconomy.com/hs-fs/hubfs/Third-Economy-logo-horizontal-1.png?width=1500&height=381&name=Third-Economy-logo-horizontal-1.png "Third-Economy-logo-horizontal-1")](https://www.thirdeconomy.com/) [SUSTAINABILITY SERVICES](https://www.thirdeconomy.com/corporate-services/) [INVESTOR SERVICES](https://www.thirdeconomy.com/investor-services/) [VIA3](https://www.thirdeconomy.com/ratings/) [ABOUT](https://www.thirdeconomy.com/about/) [NEWS & EVENTS](https://www.thirdeconomy.com/news-events/) [CONTACT](https://www.thirdeconomy.com/contact/) ![Thought Leadership Webpage Graphic-1](https://pages.thirdeconomy.com/hubfs/Thought%20Leadership%20Webpage%20Graphic-1.png "Thought Leadership Webpage Graphic-1") ## States Are Powering Sustainability—and Moving Climate Regulation Forward ***By Third Economy, September 2026*** Governor Gavin Newsom’s [September 23 announcement](https://www.gov.ca.gov/2026/09/23/governor-newsom-announces-key-step-forward-in-california-plan-to-link-carbon-markets-with-washington-state/) that California is moving forward with the process to link its Cap-and-Invest carbon market with Washington State’s was another clear signal from Climate Week NYC: even as federal climate policy becomes less predictable, states are continuing to build the regulatory systems that will shape the U.S. transition. The California-Washington linkage is not yet complete—it must still move through formal regulatory processes—but it would expand coordination between two major state carbon markets and build on California’s existing linkage with Québec. More than a carbon-market development, it is a sign that state climate policy is consolidating rather than fragmenting. States are advancing rules that set expectations for emissions disclosure, climate-risk management, clean-energy investment, building performance, and corporate accountability. California remains the most prominent example because of both the scale of its economy and the reach of its climate laws. But the larger story is not California alone. States are proving that climate action can continue through regulation, regional coordination, and market design—even in the absence of a consistent federal framework. At a Glance - **States are creating durable climate infrastructure.** Disclosure rules, carbon markets, clean-energy standards, and resilience requirements are becoming embedded in state policy and business planning. - **California is setting a broad precedent.** Its climate disclosure laws (CA SB 253 and 261) reach qualifying public and private companies with California business activity—not only public issuers. - **Regional coordination is growing.** California has authorized the regulatory process to link its Cap-and-Invest program with Washington State, with joint operation targeted for 2027 if the process is completed. - **The focus is shifting to implementation.** Companies are increasingly working through existing obligations: building emissions inventories, evaluating climate-related financial risk, and improving the governance and systems needed to report credibly. The practical impact of California’s disclosure laws extends well beyond the companies directly covered. As businesses prepare to report emissions across their value chains and assess climate-related risks, suppliers, customers, lenders, insurers, and other partners are likely to face rising requests for reliable sustainability information. That is how state climate rules create broader market expectations: not only through direct legal obligations, but through the commercial systems that support compliance. The proposed California-Washington carbon-market linkage points to another way states are moving regulation forward. For policymakers, it shows that climate programs can become more effective when jurisdictions coordinate rather than operate in isolation. While the agreement has not yet been finalized, the announcement matters because it demonstrates policy continuity: states are still building frameworks designed to endure beyond individual legislative sessions or shifts in federal priorities. What Comes Next California’s disclosure laws and its work with Washington point to a broader model for state climate action: turn climate goals into enforceable requirements, create the data and market systems needed to support them, and coordinate across jurisdictions where scale strengthens impact. For companies, state climate policy is no longer a future consideration or a narrow reporting issue. It is becoming part of the operating environment—affecting what organizations measure, disclose, buy, build, insure, and plan for. The practical response is to establish credible emissions data, clarify governance responsibilities, track applicable state requirements, and integrate climate-related risk into core business planning. The California-Washington linkage process will be closely watched as a test of how effectively states can coordinate ambitious climate policy. As federal direction remains uncertain, state action is making the path forward more concrete—and raising the stakes for organizations that wait to prepare.   If we can be helpful as you consider how these insights will affect your business, please don’t hesitate to reach out to our team. Contact us: Abbe Billings, Partner, Third Economy [abbe.billings@thirdeconomy.com](mailto:abbe.billings@thirdeconomy.com)   *Sources: California Governor’s Office, September 23, 2026; Washington State Department of Ecology; California climate-disclosure law guidance.* *Disclaimer: The information provided does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available are for general informational purposes only.* [Schedule Time with our Experts](mailto:abbe.billings@thirdeconomy.com) - Turning visitors into leads. ### Want to receive our latest news and events? 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