SB 261 and SB 253: Latest News & Updates on California Climate Laws
SB 261 & SB 253: This article contains the latest news and updates on the California Climate Laws (SB 261, SB 253). Bookmark this page and check for regular updates.
SB 261 (California’s Climate-Related Financial Risk Act) UPDATE: As a reminder, SB 261 requires all business entities engaged in business in California — with annual revenues over $500M — to submit biennial disclosures regarding climate-related financial risk (CRFR). Although the initial SB 261 report deadline was January 1, enforcement remains paused. The Ninth Circuit entered a temporary injunction on November 18, 2025 that stayed enforcement of SB 261’s reporting requirements (including the original January 1, 2026 reporting deadline) pending appeal. Scroll below for critical information about the CARB checklist & guidance, and the preliminary list of companies just released on September 29th, 2025.
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FEBRUARY 26, 2026 UPDATE: Following a public hearing on February 26th, 2026, CARB formally adopted the California Greenhouse Gas Reporting and Climate Financial Risk Disclosure Initial Regulation, an initial step in meeting the regulatory requirements of SB 253 and 261.
Per the CARB website: “The regulation establishes how fees will be assessed to cover the cost of program administration, specifies key definitions necessary for fee assessment and program application, and establishes a first-year reporting deadline. Adoption of the regulation will enable CARB to administer and fund the statutory reporting programs under the two bills.
“By establishing clear and consistent disclosure requirements, California is ensuring that the state’s investors and consumers have access to reliable information to inform their decisions and is joining other jurisdictions around the world in requiring climate data transparency. Many business leaders are already choosing to engage early, a clear indication they recognize the importance of climate-related risk transparency to inform business and consumer decisions,” said CARB Chair Lauren Sanchez.
The regulation covers large corporations doing business in the state with revenue over $500 million or $1 billion depending on the statute. It identifies a flat-rate fee structure and establishes Aug. 10, 2026, as SB 253’s first-year reporting deadline based on stakeholder feedback. Reporting for SB 253 for the first year will include only Scope 1 and Scope 2 emissions. Scope 1 emissions are direct greenhouse gas (GHG) emissions from sources that are controlled or owned by an organization. Scope 2 emissions are indirect GHG emissions from the purchase of electricity, steam, heat or cooling. The regulation also clarifies that the revenue threshold would be tied to entities’ gross receipts as reported to the California Franchise Tax Board to streamline implementation and verification.
Through a voluntary public docket maintained by CARB, companies have begun submitting climate-related financial risk reports. Currently, more than 120 climate-related financial risk reports have been voluntarily submitted and made publicly available. The reports come from both private and public entities spanning a range of industries, including manufacturing, technology, healthcare, energy, transportation, finance and consumer services.
CARB’s priority is to focus on supporting compliance through stakeholder engagement and will use enforcement discretion for good-faith first-year submissions.
Entities exempt from reporting include tax exempt non-profits and charities, government or majority-owned government entities, and California businesses regulated by the Department of Insurance or insurance businesses in any other state, among a few other exemptions. “
DECEMBER 1ST, 2025 UPDATE — On December 1, 2025, the California Resources Board (CARB) issued an Enforcement Advisory. which noted that it will not enforce the January 1, 2026 deadline for filing the SB 261 report due to a Ninth Circuit Court injunction. However, companies can still voluntarily report via a public docket open until July 1, 2026, while awaiting a final ruling from the appeals court. Covered entities should continue preparing their reports as CARB plans to provide new timelines after the legal challenge is resolved, with draft regulations expected in early 2026. If you adopted the TCFD framework into your reporting
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CHECKLIST — On September 2nd, 2025, CARB released a draft checklist for SB 261 for the initial climate-related financial risk report that must be posted on a company’s website by January 1, 2026. The checklist includes minimum disclosures, clarifications, key links, and resources related to the frameworks (e.g. TCFD, IFRS2 ) that companies may use to meet reporting requirements. NOTE: CARB has noted that including Scope 1,2, and 3 emission reporting is not a minimum requirement for initial SB 261 reporting on January 1, 2026.
PRELIMINARY COMPANY LIST — Is your company on the CARB list? On September 29th, CARB published its preliminary list of thousands of entities that may be subject to upcoming reporting requirements under either or both SB 253, which covers GHG emissions, and SB 261, which covers climate-related financial risks. CARB has acknowleged that the list may be incomplete and has posted a survey to collect more information about additional entites that may be subject to regulations or stakeholders that might qualify for an exemption. The agency stated the following: "Each potentially-regulated entity remains responsible for compliance with statutory requirements, regardless of whether it was included in staff’s preliminary list or outreach."