On September 2, the California Air Resources Board (CARB) released a draft disclosure checklist for reporting under SB-261.
At its second public workshop on August 21, CARB staff discussed 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. CARB also introduced several early-stage proposals on which it is seeking public feedback until September 11.
Scroll down to read key takeaways from CARB’s workshop and our updated Hot Topic. Plus, register for our upcoming webcast.
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. |
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.
Click on the links to understand what each of the three climate laws cover.
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.
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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.
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.
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.
- 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 August 21 workshop was the second in a planned series – read more about the key proposals (subject to public comment and change) in our Hot Topic – followed by publication of a draft disclosure checklist.
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.
SB-261 reporting on January 1, 2026 would include streamlined disclosures based on the 2017 TCFD recommendations. On September 2, CARB released a draft disclosure checklist to be used as a starting point for companies complying with SB-261. Opportunities would be included, GHG emissions could be excluded from the first report, and resilience disclosures need not include a formal qualitative scenario-based assessment.
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’.
The FAQs generally emphasize previous points made (download our Hot Topic).
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.
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.
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.
The workshop was the first in a planned series – here are key takeaways.
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.
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.
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.
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.
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California climate laws – the draft regulations
Join our specialists for a closer look at the draft regulations that will underpin the laws – now open for comment.
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What does California climate risk reporting look like?
In this webcast, our specialists take a deeper look at the TCFD reporting required under California’s climate laws.
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Handbook: GHG emissions reporting
Our guide explains the measurement and reporting of GHG emissions through the lens of the Greenhouse Gas Protocol.
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