AUGUST 27, 2025

All about California’s climate laws

The laws require reporting about climate risks and GHG emissions for all US companies in scope – whether public or private. With reporting set to begin on January 1, 2026, we keep you up to date with the latest news.

Latest: Draft regulations coming mid-October

On August 21, the California Air Resources Board (CARB) held its second public workshop to discuss the development of regulations that will underpin SB-253 and SB-261. CARB plans to issue draft regulations in mid-October – covering at least scoping and fees – which will be open for public comment until November 30. Regulations would be finalized in December. CARB also introduced several early-stage proposals on which it is seeking public feedback until September 11. 

Scroll down to read the key takeaways from CARB’s second workshop and download our updated Hot Topic.

What’s in the climate laws?

Companies throughout the US and globally – public and private – could be impacted by California’s climate disclosure laws: SB-253 (GHG emissions), SB-261 (climate risks) and AB-1305 (carbon offsets). Reporting under SB-253 and SB-261 begins in 2026.

Read our Hot Topic

The Sustainability Report: Going back to Cali

How can companies prepare for 2026 climate reporting without final regulations? Our specialists discuss the latest on CARB’s process, key reporting challenges, and actionable steps to comply with California’s climate laws. Tune in to our latest podcast episode.
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Understand the climate laws

Here you’ll find key information to help you navigate the evolving landscape of the California climate laws. Use the jump links below to quickly access specific topics: a fast overview of the climate laws, details about the California legislative process under the APA, and key points covering the latest CARB developments.

Fast overview of the climate laws

Click on the links to understand what each of the three climate laws cover.

SB-253 (GHG emissions)

SB-253 (GHG emissions)

The Climate Corporate Data Accountability Act, as amended by SB-219, mandates the disclosure of GHG emissions. It applies to US businesses that meet specified revenue thresholds and do business in California. The effective date for reporting is 2026 for scopes 1 and 2 and 2027 for scope 3.

Read more
SB-261 (climate risks)

SB-261 (climate risks)

The Greenhouse Gases: Climate-related Financial Risk Act, as amended by SB-219, mandates the disclosure of climate-related financial risks and measures adopted to reduce and adapt to such risks. It applies to US businesses that meet specified revenue thresholds and do business in California. The effective date for reporting is on or before January 1, 2026.

AB-1305 (carbon offsets)

AB-1305 (carbon offsets)

The Voluntary Carbon Market Disclosures Act mandates disclosures about voluntary carbon offsets and emissions reduction claims. It applies to US and international companies that undertake specified activities in California or make certain claims. The effective date for reporting is January 1, 2024. Proposed amendment AB-2331 would change this date to July 1, 2025 but failed to pass before the end of California’s 2024 legislative session.

Understanding the California legislative process under the APA

In developing regulations, CARB will follow California’s structured process for adopting regulations set forth in the Administrative Procedure Act (APA). The objective of the APA process is to ensure that regulations are developed with public input, legal clarity and accountability.

CARB has one year from the date of releasing proposed regulations for public comment (Notice of Proposed Action) through to final approval and filing.

For an overview of the APA process, click on the steps below.

Step 1: Initiation and drafting

The process begins when CARB identifies the need for new regulations and drafts the proposed regulations – including a statement of reasons, economic impact assessments and any supporting documentation.

Step 2: Notice of Proposed Action

  • Once CARB has drafted proposed regulations, it will solicit public comments by issuing a Notice of Proposed Action.
  • From this point, CARB has one year to issue final regulations in Step 6. If it fails to do that, the process begins again.

Step 3: Public comment period

  • The comment period must be at least 45 days.
  • During this time, interested parties can submit written comments or request public hearings.

Step 4: Redeliberation

  • Following the comment period, CARB will redeliberate.
  • If substantial changes are made to the proposed regulations in redeliberation, an additional 15-day comment period (Step 3) must be provided for the revised text.
  • This step culminates in the preparation of a ‘final statement of reasons’, which explains the rationale behind the regulations, summarizes and responds to public comments, and outlines any changes made.

Step 5: Submission to the OAL

  • CARB will submit its final rulemaking file to the Office of Administrative Law (OAL), which will assess whether APA standards have been met.
  • These standards are :

Authority. CARB must have legal authority (under SB-253 and SB-261) to adopt the regulations.

Reference. The regulations must properly cite the relevant statutes or other legal provisions.

Consistency. The regulations must not conflict with existing laws or other regulations adopted by CARB and should align with the broader legal and regulatory framework.

Clarity. The regulations must be written so that they are easily understood by those who are directly affected. This includes using plain language, avoiding jargon and ensuring the regulations are internally consistent and unambiguous.

Non-duplication. The regulations must not in effect duplicate any other state law or regulation.

Necessity. The regulations must be essential to carry out the purpose of the law.

  • The OAL will have 30 working days to complete its review.

Step 6: Approval and filing

  • Assuming the OAL approves the regulations, it will file them with the Secretary of State to become law.
  • The regulations’ effective date(s) will depend on what type of regulations they are and when they are filed, but regulations typically become effective on one of four quarterly dates unless otherwise specified.
  • If the OAL does not approve the regulations and Step 6 is not completed within a year of Step 2, the process will begin again.

Aug 21: CARB workshop

The workshop was the second in a planned series – read more about the key proposals (subject to public comment and change) in our Hot Topic.

01
Proposed June 30, 2026 deadline for first GHG emissions reports

CARB staff confirmed that the ‘prior fiscal year’ for SB-253 reporting would be fiscal year 2025, and they are seeking public feedback on the proposed deadline. A draft reporting template is set to be released by the end of September.

02
Proposed guidance for climate risk reporting

SB-261 reporting on January 1, 2026 would include streamlined disclosures based on the 2017 TCFD recommendations. Opportunities would be included, but GHG emissions and scenario analysis could be excluded from the first report.

03
Proposed scoping

Non-profits would be excluded from the scope of SB-253 and SB-261. CARB staff are exploring public databases to help establish which companies are ‘doing business in California’.

July 9: CARB releases FAQs

The FAQs generally emphasize previous points made (download our Hot Topic).

01
Fiscal year covered in first climate risk reports (SB-261)

The FAQs confirm that a company’s first climate risk report – due by January 1, 2026 – may cover either fiscal year 2024 or fiscal year 2025 depending on what is reasonable for the organization.

02
Public docket for climate risk reports (SB-261)

The FAQs note that CARB will post a public docket on December 1 for a company to register the URL of where its climate risk report is hosted on its website – to facilitate transparency and public review.

03
Completion of first-time assurance (SB-253)

The FAQs indicate that the timeline for verification of GHG emissions – limited assurance on scopes 1 and 2 in the first instance – will be determined through additional public consultation and the rulemaking process.

May 29: CARB workshop

The workshop was the first in a planned series – here are key takeaways.

01
Despite regulatory delays, 2026 reporting will not be pushed back

At the workshop, it was repeatedly emphasized that the reporting dates cannot be changed – despite delays in developing the underlying regulations – because they are in the laws. This means that the first reporting under SB-261 (climate risks) is due by January 1, 2026, and the first reporting under SB-253 (GHG emissions) is due in 2026.

02
Reliance on good faith efforts in the first year

To facilitate reporting before regulations are final, CARB will not seek to impose penalties for ‘good faith efforts’ – relying on the relief in the laws and the CARB enforcement notice issued in December 2024. Read more in our Hot Topic (see link below). In addition, CARB staff indicated they will keep lines of communication open during 2025 to provide their latest thinking.

03
Resolving interpretive issues: scoping first

Notwithstanding the enforcement relief in the first year, CARB acknowledges that there are a significant number of interpretative questions that remain unresolved. Through a series of workshops to be held in 2025, it will work through the issues, focusing on scoping first. In the May workshop, CARB staff revealed tentative thinking that ‘doing business in California’ would be based on the California Revenue and Taxation Code. However, CARB remains open to discussion and encouraged constituents to express their views in writing.

Download our Hot Topic:

Draft regulations coming mid-October for California climate laws

2026 reporting will not be pushed back, with CARB set to issue draft regulations in mid-October, final regulations in December.

Download PDF

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