Navigating California’s climate disclosure bills: What businesses need to know ahead of the August 10th deadline

While parts of its overall climate reporting initiatives are being held up in court, California's first-of-its-kind law requiring businesses to report carbon emissions has already been enacted, with reports due mid-August. In October 2023, California enacted Senate Bills 253 and 261, which require large companies doing business in the state to publicly report their greenhouse gas (GHG) emissions and climate-related financial risks. There is a current injunction pausing the enforcement of SB 261. But SB 253 is moving forward, and companies with annual global revenue exceeding $1 billion doing business in California are expected to publicly report their Scope 1 and 2 GHG emissions by August 10th, 2026.

Requirements of California Bills 253 and 261

SB 253 requires companies with annual global revenue exceeding $1 billion doing business in California to publicly report their GHG emissions. Beginning with 2025 emissions, reported in 2026, companies must disclose Scope 1 and 2 emissions by August 10th, 2026. Initially, the bill required limited third-party assurance in the first year, but this requirement was eliminated when the enforcing agency, the California Air Resources Board (CARB), relaxed the mandates for the inaugural reporting year. In 2027, Scope 3 emissions reporting begins, with assurance requirements being phased in and ramping up until 2030. The regulation aims to ensure reliable, transparent emission data for stakeholders while promoting accountability and emissions reduction.

For the first year of SB 253 reporting, in 2026, CARB says it will exercise enforcement discretion, provided companies demonstrate “good faith efforts” to comply. This means that companies will not face penalties if they respond solely with data they already possessed or already had processes in place to collect as of December 2024. However, we advise companies not to rest on their laurels – they will be required to report a full emissions inventory in 2027 and meet limited assurance requirements for Scope 1 and 2 emissions. If data is incomplete for 2026 reporting, this only increases the need to introduce assurance-ready reporting systems ahead of the 2027 reporting cycle.

In parallel, SB 261 mandated biennial climate-related financial risk disclosures for companies that generate over $500 million in revenue and operate in California. These reports are currently on hold, pending a decision by the US Court of Appeals for the 9th Circuit. No date has been given for when the decision may be announced. Should the injunction be lifted, reports must align with established frameworks such as the Task Force on Climate-Related Financial Disclosures (TCFD) or the IFRS Sustainability Disclosure Standards, which are already fully or partially implemented by many large U.S. businesses [1]. Reporting in line with SB 261 requires companies to disclose how they identify and assess climate-related risks relevant to their operations and supply chain; the specific risks they have identified; and how these impact their strategy and financial planning. Reports must be published on each reporting entity’s website and every two years thereafter. The California Air Resources Board (CARB) has opened a public docket for companies to submit their disclosures, which they can currently do voluntarily.

Opportunities beyond compliance

Preparing for these disclosures is not just a regulatory exercise. It is a strategic opportunity. Gaining a clearer understanding of your company’s greenhouse gas emissions and climate-related financial risks can unlock insights that aid enterprise risk management, strengthen business resilience and inform smarter investment and innovative decision-making in light of a continuing global transition toward a low-carbon economy.

Transparent climate reporting builds trust with investors, customers, and regulators, while signaling long-term resilience. Companies that act early are better positioned to attract long-term investment, meet evolving stakeholder expectations, and stay ahead of competitors as disclosure requirements grow globally.

How SLR can help

At SLR, our Corporate Sustainability team supports clients in navigating complex state and federal requirements. We specialize in calculating GHG inventories, facilitating independent assurance processes, conducting climate scenario analyses, and crafting TCFD-aligned disclosures tailored to California’s regulatory requirements. Our experience helping companies comply with SB 253 and SB 261 ensures you can meet deadlines confidently while developing a strategic view of your climate risks and opportunities.