Navigating the New California Climate Bill: What Businesses Need to Know About SB-253

California’s new climate laws are changing how companies report on their environmental impact. If your business operates in California, you’ve probably heard about SB-253 and SB-261. These laws require large companies to track and share data about their greenhouse gas emissions and climate-related financial risks. The rules can feel overwhelming, especially with deadlines, new fees, and ongoing legal challenges. This article breaks down what you need to know about the California climate bill package, so you can figure out if your business is affected and how to start getting ready.

Key Takeaways

• SB-253 and SB-261 require large companies doing business in California to report greenhouse gas emissions and climate-related financial risks.
• The rules apply to both public and private companies that meet certain revenue thresholds, even if they’re headquartered outside California.
• Reporting includes Scope 1, 2, and later Scope 3 emissions, with third-party assurance required over time.
• California’s Air Resources Board (CARB) is in charge of enforcing the laws, setting fees, and offering guidance, but some deadlines have shifted due to legal challenges.
• Businesses should start collecting emissions data, review if they meet the thresholds, and keep an eye on updates from CARB and the courts.

Understanding California's Climate Corporate Data Accountability Act (SB 253)

So, let's talk about SB 253, also known as the Climate Corporate Data Accountability Act. This is a pretty big deal for businesses operating in California, or even just doing business there. Basically, it's a new law that requires companies to start reporting their greenhouse gas (GHG) emissions. It's not just a suggestion; it's a mandate.

Key Requirements of SB 253

This act lays out some clear expectations for companies. The main goal is to bring more transparency to corporate climate impact. It means you can't just ignore your emissions anymore; you have to measure them and report them.

Here’s a quick rundown of what’s expected:

• Reporting Emissions: Companies need to report their Scope 1, Scope 2, and Scope 3 emissions.
• Public Disclosure: These reports will be made public, so stakeholders can see your company's environmental footprint.
• Third-Party Assurance: The reported data will need to be checked by an independent third party to make sure it's accurate.

Scope 1, 2, and 3 Emissions Reporting

When they talk about emissions, they're breaking it down into three main categories, or 'scopes'. Understanding these is key to compliance.

• Scope 1: These are the emissions your company directly controls. Think of emissions from company-owned vehicles or on-site fuel combustion.
• Scope 2: This covers emissions from the electricity, steam, heating, or cooling your company purchases. It's about the energy you use that's generated elsewhere.
• Scope 3: This is the big one and often the most complex. It includes all other indirect emissions that happen in your company's value chain. This could be anything from employee commuting and business travel to the emissions from producing the materials you buy or the end-of-life treatment of your products.

Assurance and Timeline for SB 253 Compliance

Getting the data is one thing, but making sure it's reliable is another. SB 253 includes requirements for assurance, meaning an independent verifier will look at your reported numbers.

• Initial Reporting: For emissions from fiscal year 2025, Scope 1 and Scope 2 reporting is due by August 10, 2026. At this stage, a limited assurance level is required.
• Scope 3 Reporting: Reporting for Scope 3 emissions is slated to begin later, with the exact schedule to be determined by the California Air Resources Board (CARB).
• Full Assurance: By 2030, the requirement will move to reasonable assurance for all reported emissions, which is a higher level of verification.

It's important to note that while some deadlines might seem a bit off, starting to build your data collection and reporting processes now will make things much smoother down the line. Waiting until the last minute is probably not the best strategy here.

Navigating the Climate-Related Financial Risk Act (SB 261)

Beyond just tracking greenhouse gas emissions, California's SB 261, also known as the Climate-Related Financial Risk Act, asks businesses to look at how climate change itself could impact their bottom line. It's about understanding the financial side of climate risks, not just the direct emissions. Think of it as a check-up for your business's financial health in a changing climate.

Disclosure of Climate-Related Financial Risks

SB 261 requires companies that do business in California and have over $500 million in annual global revenue to report on their climate-related financial risks. This report needs to cover both physical risks (like extreme weather events damaging property or disrupting supply chains) and transition risks (like policy changes, new technologies, or market shifts that affect the value of assets). The goal is to give stakeholders a clearer picture of how these risks might affect a company's financial stability and operations.

Alignment with Existing Reporting Frameworks

To make things a bit simpler, SB 261 doesn't ask companies to reinvent the wheel. The reports are expected to align with established frameworks, most notably the Task Force on Climate-Related Financial Disclosures (TCFD). This means if your company is already reporting using TCFD recommendations, you're likely on the right track. The California Air Resources Board (CARB) has indicated that other recognized standards might also be acceptable, but TCFD is the primary reference point.

Biennial Reporting and Compliance Deadlines

SB 261 mandates that these reports be submitted every two years. The initial reporting period was set to begin January 1, 2026. Companies were expected to submit their first report, which could be a URL to their publicly available report, between December 1, 2025, and July 1, 2026. However, it's important to note that there have been some legal challenges and delays. A temporary injunction from the Ninth Circuit Court of Appeals has paused the implementation of SB 261, and CARB has confirmed this pause. While the original deadline was January 1, 2026, the current status means compliance is on hold pending further legal and regulatory developments.

The focus of SB 261 is on financial preparedness and transparency regarding climate change impacts. It encourages companies to think proactively about potential financial disruptions and how they plan to manage them, rather than just reporting emissions data.

Applicability and Revenue Thresholds for California Climate Bills

So, who exactly has to deal with these new California climate laws, SB 253 and SB 261? It's not every single business out there, thankfully. The state has set specific benchmarks based on revenue and where a company operates. Basically, if you're doing business in California and hit certain financial marks, you're likely on the hook.

Defining "Doing Business in California"

This phrase might sound straightforward, but it can get a little fuzzy. Generally, it means a company is actively engaged in business within the state. This could include having a physical presence like an office or store, employees working in California, or even just generating significant revenue from customers located there. It's not just about where your headquarters are; it's about your economic activity within the Golden State.

Revenue Thresholds for SB 253 and SB 261

This is where the rubber meets the road for most companies. The laws have different revenue requirements:

• SB 253 (Climate Corporate Data Accountability Act): This one applies to companies with an annual global revenue exceeding $1 billion.
• SB 261 (Climate-Related Financial Risk Act): This law has a slightly lower threshold, requiring disclosures from companies with an annual total global revenue exceeding $500 million.

It's important to note that these are global revenue figures, not just California-specific income. So, even if California is a small part of your overall business, if your total revenue meets these numbers, you'll need to pay attention.

Impact on Public and Private Companies

These bills aren't just targeting publicly traded giants. Both SB 253 and SB 261 apply to both public and private companies. This means that if your private company meets the revenue thresholds and does business in California, you'll need to comply. It's a pretty broad reach, aiming to capture a significant portion of the business landscape operating within the state.

The intention behind these revenue thresholds is to focus the reporting burden on larger entities that have a more substantial economic footprint and, consequently, a greater potential impact on climate change and its associated risks. Smaller businesses are generally exempt, allowing them to concentrate on their operations without the added compliance overhead.

CARB's Role in Administering the California Climate Bills

CARB's Oversight and Enforcement Authority

The California Air Resources Board (CARB) plays a central part in rolling out and enforcing the state's major corporate climate reporting laws: SB 253 and SB 261. CARB is responsible for setting the rules, overseeing disclosures, and making sure companies follow the law. If a company misses reporting deadlines, files inaccurate information, or ignores requirements, CARB can fine them—sometimes up to $500,000 per year for the larger law. The main reasons CARB steps in include:

• Failure to submit required emissions or risk reports
• Reporting incomplete or false data
• Not meeting submission deadlines

CARB doesn't just enforce penalties; they also answer questions and provide resources on how to comply.

Draft Regulations and Guidance Updates

Right now, CARB is working on the final rules and guidance that will shape how businesses handle emissions and risk reporting. There have been a couple of delays, but as of early 2026, companies are watching closely for new drafts. The most recent schedule suggests:

• SB 253 (greenhouse emissions): Final disclosure deadline for Scopes 1 & 2 is now August 10, 2026
• SB 261 (climate-related risk): Reporting is paused due to a court injunction, but CARB expects companies to prepare

CARB runs workshops and releases written FAQs, which break things down into practical steps. These are especially helpful while the final rulemaking is still in progress.

Companies should keep an eye on CARB updates and attend workshops as new regulations are published, since even small changes could impact reporting requirements.

Fees Associated with Compliance

Reporting isn’t free. CARB charges annual, flat fees to cover program administration, which depend on which law applies to your business. Here’s what’s expected as of 2026:

A few things to note:

• Subsidiaries that file separately also pay separate fees
• Fees are subject to change as CARB finalizes the process
• Late payments or nonpayment can trigger extra penalties

CARB also requires independent third-party verifiers to review some emissions reports, which may mean additional costs for businesses.

If you’re trying to figure out what applies to your company, make sure you budget for both direct CARB fees and any cost for hired reporting help. Missing a payment or skimping on assurance could end up far more expensive in the long run.

Preparing for Compliance with the California Climate Bill Package

Okay, so California's new climate laws, SB 253 and SB 261, are a pretty big deal for businesses. It's not just about ticking boxes; it's about getting your ducks in a row to report your emissions and climate risks accurately. Starting early is definitely the way to go.

Assessing Your Company's Exposure

First things first, you need to figure out if these laws even apply to you. Both bills have revenue thresholds. SB 253, the Climate Corporate Data Accountability Act, targets companies with over $1 billion in annual revenue, while SB 261, the Climate-Related Financial Risk Act, looks at those with over $500 million. It's not just about where you're headquartered; if you do business in California and hit those revenue marks, you're likely in scope. You'll want to get a handle on your global revenue and confirm your operations within California. This initial assessment is key to understanding the scope of what you need to do.

Developing Robust Data Collection Processes

This is where the real work begins. For SB 253, you'll need to report Scope 1, 2, and 3 greenhouse gas emissions. Scope 1 is direct emissions from your operations, Scope 2 is from purchased electricity, and Scope 3 covers all other indirect emissions, like your supply chain and product use. This can get complicated, especially Scope 3. You'll need to establish clear processes for collecting accurate data. Think about setting up systems to track energy usage, fuel consumption, and supplier data. It’s a good idea to start building these processes now, even if the full reporting deadline for Scope 3 is a bit further out. Getting a handle on your emissions data is a major step towards preparing for California Senate Bill 253.

Leveraging CARB Resources and Expert Support

Don't try to go it alone. The California Air Resources Board (CARB) is the agency overseeing these laws, and they'll be putting out regulations and guidance. Keep an eye on their updates. They've already delayed some of their draft regulations, so staying informed is important. Beyond CARB, there are consultants and other experts who specialize in this kind of reporting. They can help you figure out your emissions, understand the financial risk disclosures required by SB 261, and make sure your reporting is solid. It might seem like a lot, but getting the right support can make the process much smoother.

The goal here is transparency. California wants companies to be open about their environmental impact and how climate change might affect their finances. Building these reporting capabilities isn't just about compliance; it's about better business management and preparing for a future where climate accountability is the norm.

Litigation and Regulatory Updates Affecting the California Climate Bills

Staying current on the legal and regulatory shifts around California’s climate laws is a real challenge. With lawsuits, shifting deadlines, and updates from CARB, businesses have to keep a close eye on what’s required and when. These changes don’t just affect paperwork—they can really change what you need to do next.

Current Legal Challenges to SB 261

SB 261, which focused on climate-related financial risk disclosure, is currently tangled up in legal disputes. Several groups have pushed back against its requirements in federal court. There’s now a temporary injunction from the U.S. Court of Appeals for the Ninth Circuit—meaning enforcement of parts of SB 261 is on pause, at least for now. CARB confirmed in December 2025 that the law is not being implemented until the court makes a final decision. This has left many companies in a holding pattern, not knowing if they’ll need to scramble or if the law might get watered down.

• SB 261 enforcement temporarily halted due to ongoing litigation.
• Businesses should still track reporting best practices, in case requirements return quickly.
• Final court decision could affect other state-level climate reporting efforts.

Impact of Delays on Reporting Timelines

Draft regulations that spell out how SB 253 and SB 261 will work in practice have been delayed—twice. First in July 2025, again in October 2025, and now the new target is early 2026. With all this uncertainty, companies aren’t sure exactly what needs to be in their reports or when the deadlines are. For SB 253, the compliance deadline moved from June to August 10, 2026, while SB 261's deadline remains paused. For more on how CARB is moving forward despite court battles, see CARB is proceeding with SB 253.

Many businesses are waiting for finalized instructions before committing resources, but it’s not a bad idea to start preparing basic disclosures—regulations could become active again with little warning.

Monitoring Ninth Circuit Injunctions

The injunction from the Ninth Circuit is a key factor in whether companies must comply this year. While the pause is in place, CARB is still laying the groundwork, holding workshops and drafting rules in case the legal hurdles clear. Businesses need to keep monitoring the court’s actions, since the pause could be lifted at any time, requiring swift action to meet reporting rules.

• Check court updates monthly on SB 261 status.
• Review CARB advisories for guidance—even if deadlines are paused.
• Confirm with your legal or compliance team that you’re tracking the right regulatory changes.

Regulatory noise isn’t likely to quiet down soon; the best thing companies can do is keep informed and have a rough compliance plan ready to go.

New rules are coming out that affect California's climate laws. These changes could impact businesses in big ways. Want to stay ahead of the curve and understand what these updates mean for you? Visit our website to learn more and get the latest information.

Wrapping It Up

So, California's new climate laws, like SB-253, are definitely a big deal for businesses. It’s not just about reporting numbers; it’s about getting a clearer picture of your company's environmental footprint and how it might affect things down the road. While the deadlines and rules might seem a bit much right now, especially with some of the details still being worked out, getting ahead of this is smart. Start looking at your emissions data and thinking about how you’ll report it. It’s a shift, for sure, but one that’s becoming the norm, and being prepared will make things a lot smoother.

Frequently Asked Questions

What is California’s SB-253 climate bill about?

SB-253 is a new law in California that asks big companies to share details about their greenhouse gas emissions. This means companies must count and report how much pollution they create from their own activities, their energy use, and even from their supply chains.

Which companies have to follow SB-253 and SB-261?

Any business, whether public or private, that makes over $1 billion a year and does business in California must follow SB-253. For SB-261, the rule starts at $500 million in yearly revenue. If your company sells products or services in California, you likely need to pay attention to these laws.

What do Scope 1, 2, and 3 emissions mean?

Scope 1 emissions are the pollution a company makes directly, like from its own factories or vehicles. Scope 2 covers pollution from the energy the company buys, like electricity. Scope 3 is the hardest to track—it includes pollution from things the company buys, uses, or sells, and from its whole supply chain.

When do companies have to start reporting their emissions?

For SB-253, companies must report their Scope 1 and 2 emissions by August 10, 2026. Reporting for Scope 3 emissions will start later, in 2027. For SB-261, the first reports about climate-related financial risks are due by January 1, 2026, but this deadline might change because of ongoing court cases.

What happens if a company doesn’t follow these rules?

If a company doesn’t report its emissions or climate risks as required, the California Air Resources Board (CARB) can charge them fees. These fines can be thousands of dollars for each year a company doesn’t follow the rules.

Where can companies get help to follow these new climate laws?

CARB offers guides, templates, and workshops to help companies understand what they need to do. Companies can also talk to experts who know about climate rules or hire consultants to help them collect the right data and fill out the reports correctly.