When Compliance Gets Complicated, You Don’t Have to Navigate It Alone

New climate disclosure regulations are asking companies to report information they haven’t tracked before. For organizations without a dedicated sustainability team, or without a single unified structure to draw data from, that can feel overwhelming. Our recent work with the ARCO family of construction companies shows what’s possible when complexity meets the right process.

The challenge: reporting across complex organizations

ARCO has been a leader in the construction industry for over 30 years, serving major markets across the United States. In 2025, ARCO/Murray, ARCO Design/Build, and ARCO National Holdings needed to prepare Climate-related Risk Disclosure Reports in accordance with the Task Force on Climate-related Financial Risk (TCFD) recommendations, satisfying compliance requirements under California’s Climate-Related Financial Risk Act (SB 261).

Three challenges made this work especially demanding:

Sensitive information with honest disclosure. The ARCO companies needed to disclose governance, strategy, and risk management practices completely and accurately, while protecting sensitive business information.

A hub-and-spoke structure. ARCO operates as a family of independent companies without a single parent entity. That structure made unifying greenhouse gas emissions data across the group a significant undertaking.

Data that had never been collected this way. Operational data needed for accurate emissions accounting had never been tracked for this purpose across dozens of ARCO offices and job sites. Verdis Group’s team conducted extensive investigation and reformatting to convert records into a usable, reliable format.

Our approach: building on what’s already there

Rather than asking ARCO to overhaul its operations, Verdis Group started by mapping the companies’ existing activities to the TCFD framework. This allowed us to credit practices already in place and pinpoint a handful of targeted areas to formalize, avoiding unnecessary disruption to how ARCO already runs its businesses.

We also used ARCO Business Services, the company’s centralized back-office function, to streamline financial and operational data collection across the family of companies. This simplified the Scope 1 and 2 inventory process considerably.

To gather the context behind the numbers, our team conducted a materiality assessment and interviewed key personnel, delivering the final SB 261 reports ahead of the January 1, 2026 deadline.

Looking further ahead, Verdis Group is now establishing new data collection processes and systems for Scope 3 categories, including purchased goods and services, business travel, and employee commuting. This groundwork prepares ARCO for the 2027 SB 253 requirement well before it arrives.

The impact: compliance as strategy

California’s climate disclosure requirements brought real complexity, asking the ARCO companies to disclose information they had never reported before. Verdis Group helped them move through that complexity efficiently, turning a compliance requirement into a useful exercise for evaluating risk and strategy.

The ARCO companies found the process informative, easy to navigate, and minimally invasive. That partnership continues today as we update the company’s 2025 GHG inventory and prepare for expanded future reporting.

“Verdis Group’s subject matter expertise helped ARCO navigate a growing number of state regulations and create a scalable framework for compliance. Beyond compliance, they helped us understand how ESG and climate intersect with operations and governance. Our partnership gave ARCO greater confidence in how we approach ESG and climate-related risk across the business.”

Jeremy Barnes, Controller at ARCO Construction Holdings

Download the full ARCO case study here.

Why this matters for your organization

Climate disclosure regulations like SB 253 and SB 261 ask companies to look closely at how they operate, where their emissions come from, and how climate risk shapes their business. That process reveals a broader picture. Compliance data becomes a foundation for identifying climate risks and informing sustainability strategy going forward.

A methodical approach reduces regulatory exposure and demonstrates real commitment to transparency. Whether your organization is a single entity or a complex family of companies like ARCO, the path to compliance starts with understanding what you already have and building from there.

Facing new climate disclosure requirements?

Verdis Group helps large and complex organizations navigate climate disclosure spanning governance, risk assessment, and public reporting. Reach out at info@verdisgroup.com to learn how we can help, or schedule a free compliance assessment with one of our experts today.

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