California Climate Disclosure Laws
Expert Support for California Greenhouse Gas Emissions & Climate-Risk Reporting
What You Need to Know About CA Senate Bills (SB) 219, 253 & 261
California's climate disclosure regulations (SB 253, 261 & 219) impose unprecedented climate-related disclosure requirements on public and private American companies that do business in California and meet certain annual revenue thresholds.
Beginning January 1, 2026, approximately 10,000 companies operating in California must comply with these requirements, making 2025 a critical year for aligning data collection, team coordination, and strategic planning. Companies with over $500 million in revenue will fall under SB 261 and will need to publish climate-related risks, while companies with revenue over $1 billion will additionally need to meet SB 253 and disclose their corporate greenhouse gas (GHG) emissions inventory. In terms of timelines, companies subject to the laws must prepare their first climate-related reports with 2025 data to meet the 2026 compliance period.
SB 253
SB 253 mandates U.S.-based companies with revenues over $1 billion doing business in California to report their Scope 1 and 2 GHG emissions starting in 2026 and Scope 3 emissions beginning in 2027. These reports must align with the Greenhouse Gas Protocol and include limited assurance audits. Penalties for non-compliance are capped at $500,000 per reporting year, with safe harbor provisions for Scope 3 inaccuracies if reported in good faith.
Reporting Scope 1 & 2 GHG Emissions: Beginning in 2026, companies are required to publicly disclose their Scope 1 (direct emissions) and Scope 2 (indirect emissions) based on data from 2025.
Reporting Scope 3 GHG Emissions: Starting in 2027, companies must additionally report their Scope 3 emissions (indirect emissions from the entire value chain) using data from 2026.
SB 261
SB 261 requires companies with revenues exceeding $500 million and operating in California to publish biennial climate risk reports starting January 1, 2026. These reports must align with either the ISSB’s IFRS S2 Climate Risk Standard or the Task Force on Climate-related Financial Disclosures (TCFD) framework. The law includes penalties for non-reporting of up to $50,000 per reporting year. CARB is the reporting oversight agency for both SB 261 and SB 253.
SB 219
SB 219 amends certain aspects of SB 253 and SB 261 by granting the California Air Resources Board (CARB) more time to adopt specific implementing regulations and discretion around Scope 3 emissions. It clarifies consolidation processes for subsidiaries for SB 253 and aligns this to SB 261 requirements. It eliminates the fee payment upon submission for SB 261 (but does not eliminate the fee requirement itself) by January 1, 2026, and an undetermined date in 2026 for SB 253.
Leverage SCS’ Carbon Accounting and Climate Risk Expertise towards California Compliance
The second half of 2025 is a critical time period for companies that will fall under the California Climate Laws — and many companies are underestimating the reporting requirements. Some have not moved forward with preparation because the laws are facing litigation; nevertheless, it’s important for companies to continue to prepare for the rapidly approaching enforcement deadlines.
SCS Consulting Services can seamlessly support companies to achieve compliance with the full scope of the laws, or to focus on initial climate risk reporting for those companies not meeting the threshold for GHG emissions reporting.
We can additionally leverage the CDP reporting cycle and process towards making progress and demonstrating compliance with SB 261 and SB 253. CDP’s deadline is in late September, giving your company time to leverage the process — and the valuable insights and advisory support from
How Companies Can Prepare Now
Steps companies must take now to reach deadlines:
1. Start your SB 261 reporting process by leveraging SCS advisory support while completing the CDP Integrated questionnaire and Climate Module, which are aligned to IFRS S2.
2. Conduct TCFD-aligned climate risk assessments in 2025 ahead of biennial reporting starting in 2026 — we co-create a tailored approach to preparing data, organizing materials, and report submission.
3. Determine Scope 1 and 2 emissions in 2025 for public disclosure starting in 2026 — we lead your company through the entire process.
4. Engage suppliers — we collaborate with you to start engaging early, aligning data collection for Scope 3 reporting beginning in 2027.
5. Prepare for limited assurance audits of Scope 1 and 2 emissions by 2026 — this means reports must meet proper confidence parameters to be compliant.