On August 21, the California Air Resources Board (CARB) held its second major public workshop on the state’s new corporate climate disclosure laws. These laws—SB 253 (greenhouse gas disclosure) and SB 261 (climate risk disclosure)—will set the first large-scale U.S. requirements for companies to publish emissions and climate risk data.

The session, which lasted more than three hours, focused on who must comply, what must be reported, how the process will work, and when deadlines apply. Below are the highlights most relevant for corporate ESG and compliance leaders.

The Laws at a Glance

• SB 253 – Climate Corporate Data Accountability Act
  Applies to U.S.-based companies with over $1B in annual revenue doing business in California. Requires annual disclosure of Scope 1, 2, and 3 GHG emissions starting in 2026 for FY2025. Reporting must follow the Greenhouse Gas Protocol and will be subject to third-party assurance that becomes stricter over time.

  
  

• SB 261 – Climate-Related Financial Risk Act
  Applies to companies with over $500M in revenue doing business in California. Requires biennial reports aligned to the Task Force on Climate-related Financial Disclosures (TCFD) or equivalent, starting January 1, 2026.

  
  

• AB 1305 – Voluntary Carbon Market Disclosures Act
  Requires entities making carbon-neutrality or net-zero claims to disclose details on their use of voluntary carbon offsets (VCOs).

  
  

• SB 219 (Amendments)
  Updated SB 253 and SB 261 by clarifying consolidation at the parent-company level, extending CARB’s rulemaking deadlines, and shifting timing for Scope 3 reporting.

Who is in Scope?

CARB estimates ~2,600 companies fall under SB 253 and ~4,100 companies under SB 261. Key scoping questions still under discussion:

• Revenue definition – CARB is weighing whether to use California tax code definitions or a simpler “total global revenue” approach.

  
  

• Doing business in California – CARB is considering use of the Secretary of State’s public database rather than tax records.

  
  

• Parent-subsidiary relationships – CARB may allow companies to self-report to avoid duplicative reporting.

  
  

• Exemptions – Proposals include nonprofits, government entities, companies with only teleworking employees in California, and entities engaged solely in wholesale electricity transactions.

Fees and Administration

CARB is authorized to charge annual fees to fund program administration. Current estimates:

• $3,106 per year for SB 253 reporting entities

  
  

• $1,403 per year for SB 261 reporting entities
  Companies above the $1B threshold (captured by both laws) would pay both.

Climate Risk Reporting (SB 261 – the “How”)

CARB emphasized that first-round reports (due January 1, 2026) should reflect “good faith efforts” and be based on the best available information. Reports should:

• State which framework is used (e.g., TCFD).

• Explain which recommendations were met, which were not, and why.

• Outline governance, strategy, risk management, and metrics/targets.

Scenario analysis is not required in the first reporting cycle.

GHG Emissions Reporting (SB 253 – the “When”)

• First deadline: June 30, 2026 for FY2025 Scope 1 and 2 emissions.

• Scope 3: Required starting in 2027 for FY2026 data, with timelines to be finalized by CARB.

• Templates: CARB will release draft emissions reporting templates in September.

Assurance Requirements

• Initial phase: Limited assurance on Scope 1 and 2 emissions.

• Later phase: Moves to reasonable assurance for Scope 1 and 2, and limited assurance for Scope 3.

• Potential standards under review include ISSA 5000, AA1000, ISO 14060, and AICPA standards.

Next Steps and Deadlines

• Sept. 11, 2025 – End of current public comment window.

• Oct. 14, 2025 – CARB publishes proposed regulations (including scoping definitions).

• Oct. 17–Nov. 30, 2025 – 45-day public comment period.

• Dec. 11–12, 2025 – CARB board hearing.

Executive Takeaway

CARB is still refining the scoping definitions, timelines, and assurance requirements. Companies above the revenue thresholds should prepare now by:

1. Mapping entity-level exposure to California.

2. Reviewing GHG data systems for Scope 1–3 reporting readiness.

3. Assessing existing climate risk disclosures against TCFD.

4. Budgeting for annual compliance fees and assurance costs.

The window for shaping the final rules is short—public comments are due within three weeks.