On November 18, the Ninth Circuit Court of Appeals issued an injunction halting enforcement of SB-261 while an appeal is pending, but SB-253 remains unaffected. This order stems from a lawsuit by the US Chamber of Commerce and others challenging both laws on First Amendment grounds. Oral arguments are currently scheduled for January 9.
On the same day, the California Air Resources Board (CARB) held its third public workshop to provide updates on the development of the initial regulation underpinning the laws, and answer questions from constituents. Scroll down to read more about key takeaways from the CARB’s third workshop.
In addition, CARB updated its FAQs about regulatory development and initial reports and finalized its climate-related financial risk disclosures checklist (with no substantial changes from the draft checklist posted in September).
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.
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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.
Read moreIn 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.
CARB staff plan to present their proposed initial regulation to the Board in Q1 2026. This would contain details of the fee program and the 2026 reporting deadline for SB-253, with further regulation to follow. CARB’s third workshop focused on these three topics related to the regulation.
In defining the key terms ‘gross receipts’ and ‘doing business in California’, which underpin the determination of which companies are in scope, the staff plan to revert to using the California Revenue and Taxation Code as a basis. The scoping assessment would be based on the lesser of a company’s two previous complete fiscal year revenues.
CARB staff clarified that a foreign parent may submit the consolidated report which provides the required reporting on behalf of its in-scope US subsidiaries; however, fees would be assessed on each in-scope company. In addition, the SB-261 exemption for insurance companies would be extended to SB-253 in the draft regulation.
CARB staff proposed August 10, 2026 (extended from June 30) as the first reporting deadline for SB-253. The staff reiterated that companies should take advantage of the first-year enforcement relief announced in December 2024 (read our Hot Topic), including in cases where assurance has not been obtained.
CARB has continued releasing resources to support reporting under the California climate laws.
On September 24, CARB posted a preliminary list of companies that are in scope of the laws. The list uses California Secretary of State data based on active filings through March 2022 and CARB acknowledges that it may be missing companies. Companies need to complete their own analysis rather than rely on the list.
On October 10, CARB released a draft template for reporting scopes 1 and 2 GHG emissions under SB-253. Use of the template would be voluntary for 2026 reporting. The draft includes specific data fields for granular reporting on GHG emissions, including by source and gas. The deadline for comments is Oct 27.
Draft regulations were expected mid-Oct with finalization mid-Dec. On Oct 14, CARB announced a delay that would push initial rulemaking (including related to fees) to Q1 2026. The reason for the delay – which does not change the 2026 reporting deadlines – is the volume of public comments that CARB is working through.
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.
Regulations delayed until Q1 2026 for California climate laws
2026 reporting will not be pushed back, with initial rulemaking expected in Q1 2026
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California climate laws – final countdown without regulations
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