California’s climate disclosure laws—SB 253 (the Climate Corporate Data Accountability Act) and SB 261 (the Climate-Related Financial Risk Act)—impose significant new greenhouse gas (“GHG”) emissions reporting and climate risk disclosure obligations on thousands of large companies doing business in the state.
SB 253 (codified at Health & Safety Code § 38532) requires “reporting entities” to report their Scope 1 and Scope 2 GHG emissions to the California Air Resources Board (“CARB”). The first reports are due November 10, 2026. Scope 3 emissions reporting, originally contemplated for 2026, has been deferred to 2027 under subsequent rulemaking. A business is a “reporting entity” if it is a U.S. business with annual revenues exceeding $1 billion (based on the reporting entity’s revenue for the prior fiscal year), it does business in California, and it is not exempted by statute.
SB 261 (codified at Health & Safety Code § 38533) requires “covered entities” to publish biennial climate-related financial risk reports aligned with the Task Force on Climate-Related Financial Disclosures (“TCFD”) framework. Disclosure is currently voluntary as enforcement of SB 261 is enjoined by the Ninth Circuit (Chamber of Commerce v. Sanchez, No. 25-5327), and CARB has confirmed it will not enforce SB 261 while the injunction remains in effect. A business is a “covered entity” if it is a U.S. business with annual revenues exceeding $500 million (based on the covered entity’s revenue for the prior fiscal year), it does business in California, and it is not exempted by statute.
CARB has clarified that for purposes of the climate disclosure implementing regulations, a subsidiary alone does not bring an out-of-state parent entity into scope unless the parent entity independently meets the applicable criteria, including ‘revenue’ and ‘doing business in California.’
On September 24, 2025, CARB posted a “preliminary list” of “covered” and “reporting” entities on its website.
Table Summarizing Upcoming Compliance Deadlines
| Deadline Date | Requirement | Applicability | Statutory/Regulatory Source |
| Currently voluntary due to injunction in Ninth Circuit Chamber of Commerce v. Sanchez, No. 25-5327 | SB 261 climate-related financial risk report due | Covered entities | Cal. Health & Safety Code § 38533 |
| November 10, 2026 | SB 253 Scope 1 & 2 GHG emissions report due to CARB | Reporting entities | Cal. Health & Safety Code § 38532; Reg. § 96076(a) (15-day modified text) |
| ~December 10, 2026 | On or about this date, CARB’s Executive Officer shall give notice to each reporting and covered entity of the amount of annual fees due (using fee calculation formula in Reg. §96073) | Reporting entities (SB 253) and covered entities (SB 261) | Reg. § 96074(a) (15-day modified text) |
| ~February 2027 (60 days after annual fee notice date) | Annual fees must be remitted to CARB for the current reporting year. Fee payments may be consolidated at the parent company level | Reporting entities and covered entities | Reg. § 96074(b) |
| 2027 (date TBD) | First Scope 3 GHG emissions report due (details per subsequent rulemaking) | Reporting entities | At the July 21, 2026 public workshop, CARB disclosed this is subject to future rulemaking |
SB 253: Climate Corporate Data Accountability Act (Health & Safety Code § 38532)
Scope and Applicability
SB 253 applies to U.S.-based business entities—including corporations, partnerships, LLCs, and other entity types—that meet both of the following criteria:
- Revenue threshold: Total annual revenues exceeding $1 billion, determined by the lesser of the entity’s two previous fiscal years.
- California nexus: The entity “does business in California” as defined under Cal. Rev. & Tax. Code § 23101(a) and (b).
A subsidiary alone does not bring an out-of-state parent entity into scope unless the parent entity independently meets the applicable criteria, including ‘revenue’ and ‘doing business in California.’
Exemptions. The following entities are exempt from SB 253, as outlined in Reg. § 96071:
- Nonprofits and charities that are tax-exempt under the Internal Revenue Code
- Business entities subject to regulation by the California Department of Insurance, or that are in the business of insurance in any other state
- Government entities and companies that are majority-owned, >50%, by government entities
- Business entities whose only California activity is wholesale electricity transactions
- Business entities whose only California business consists of employee compensation or payroll, including teleworkers
2026 SB 253 GHG Reporting Obligations
The first SB 253 reports are due November 10, 2026 (extended from the original August 10, 2026 deadline). For the 2026 reporting year, only Scope 1 and Scope 2 emissions are required. Scope 3 emissions reporting is not required for 2026 and has been deferred to 2027 under subsequent rulemaking. “Scope 1 emissions” means all direct greenhouse gas emissions that stem from sources that a reporting entity owns or directly controls, regardless of location, including, but not limited to, fuel combustion activities. (Cal. Health & Safety Code § 38532(b)(3)) “Scope 2 emissions” means indirect greenhouse gas emissions from consumed electricity, steam, heating, or cooling purchased or acquired by a reporting entity, regardless of location. (Cal. Health & Safety Code § 38532(b)(4))
Reporting period: Reports must cover the “applicable preceding fiscal year.” For entities with a fiscal year ending on or before February 1, this means the fiscal year ending in the current calendar year. For entities with a fiscal year ending after February 1, reports cover the previous fiscal year—though an entity may elect to report the most recent fiscal year if data is available. (Reg. § 96076(b))
Consolidated reporting: Reports may be consolidated at the parent company level; subsidiaries are not required to prepare separate reports if the parent entity files a consolidated report.
Submission methods: CARB opened a voluntary intake platform on September 1, 2026 to streamline first-year reporting. Entities may submit via the intake platform or by email to [email protected].
Acceptable reporting for 2026:
- Entities may submit Scope 1 and 2 emissions based on information they already had or were collecting as of December 5, 2024
- Data already reported to other GHG reporting programs
- CARB’s Draft Scope 1 & 2 Template (voluntary)
- Entities that were not collecting GHG data as of December 5, 2024, should submit a statement of non-reporting on company letterhead
- Limited assurance is not required for 2026 (it has been waived for the first year)
Penalties
- Cal. Health & Safety Code § 38532 provides that CARB shall adopt regulations that authorize it to seek administrative penalties for not filing, late filing, or other failure to meet the requirements of this section.
- The administrative penalties imposed on a reporting entity shall not exceed five hundred thousand dollars ($500,000) in a reporting year.
- CARB is required to consider “the violator’s past and present compliance” and “whether the violator took good faith measures to comply.” There are additional leniency factors to consider for Group 3 disclosures.
SB 261: Climate-Related Financial Risk Act (HSC § 38533)
Scope and Applicability
SB 261 applies to “covered entities”: U.S.-formed entities with total annual revenues exceeding $500 million that do business in California. Revenue is determined by the lesser of the entity’s two previous fiscal years. The same exemptions that apply under SB 253 also apply to SB 261. (Reg. § 96071).
Reporting Obligations
SB 261 requires covered entities to prepare and publish biennial reports on their climate-related financial risks, in accordance with the TCFD framework (or an equivalent framework). Reports must be made publicly available on the covered entity’s website and submitted to CARB.
Current Status: Ninth Circuit Injunction
Enforcement of SB 261 is currently on hold. On November 18, 2025, the Ninth Circuit issued a preliminary injunction in Chamber of Commerce v. Sanchez, No. 25-5327, enjoining enforcement of SB 261 pending appeal. The court’s injunction does not extend to SB 253, which remains in effect. Oral argument before the Ninth Circuit Appellate Court was held on January 9, 2026, supplemental citations were submitted by the parties as late as August 2026, and as of September 22, 2026, there is no decision on the docket. CARB opened a public docket on December 1, 2025, for voluntary reporting.
Penalties
SB 261 penalty provisions mirror those of SB 253 except that the cap imposed on an entity shall not exceed fifty thousand dollars ($50,000) in a reporting year. Cal. Health & Safety Code § 38533. Penalties may be imposed for failure to make climate-related financial risk disclosures publicly available or for publishing inadequate or insufficient reports.
