August 26, 2025
August 27, 2025 – As California continues to lead the charge in climate accountability, the California Air Resources Board (CARB) has released pivotal updates on the implementation of Senate Bills 253 and 261, alongside amendments from SB 219. These regulations mark a significant step forward in requiring large corporations to disclose greenhouse gas (GHG) emissions and climate-related financial risks, fostering greater transparency and alignment with the state's ambitious environmental targets.
Overview of the Regulations
Scope and Applicability: The rules apply to U.S. public and private entities "doing business in California," defined under the Revenue & Tax Code § 23101, with thresholds including sales exceeding $735,019 in 2024. SB 253 targets companies with over $1 billion in annual global revenue, while SB 261 applies to those exceeding $500 million.
GHG Emissions Disclosure (SB 253): Entities must report Scope 1 and Scope 2 emissions annually starting in 2026 (for the prior fiscal year, due by June 30), with Scope 3 emissions following in 2027. Third-party assurance is required, escalating from limited to reasonable levels by 2030.
Climate Risk Reporting (SB 261): Biennial disclosures on material physical and transition risks begin January 1, 2026, using frameworks such as TCFD or IFRS S2. Reports will be posted on company websites, with links submitted to CARB's public docket opening December 1, 2025.
Exemptions, Fees, and Platforms: Non-profits, government bodies, and select utilities are exempt. Proposed annual fees are $3,106 for SB 253 and $1,403 for SB 261 to support administration. SB 253 reporting will occur via CARB's dedicated platform, with draft templates anticipated in September 2025.
Recent Developments and Timeline
CARB's second public workshop on August 21, 2025, addressed critical elements like revenue definitions, consolidation rules for parent-subsidiary entities, and assurance standards under ISSA 5000. Stakeholder input is welcomed until September 11, 2025. Earlier FAQs from July 9, 2025, emphasize flexibility for initial filings, allowing use of existing data sets.
Rulemaking is on track, with proposed regulations expected by October 2025, a board hearing in December, and final adoption by year-end. This builds upon CARB's established Mandatory GHG Reporting Regulation, expanding to comprehensive corporate-level accountability.
Implications for Businesses
Compliance may involve estimated costs of $300,000–$600,000 annually per entity, but the emphasis on transparency is poised to drive meaningful emissions reductions and risk mitigation. For companies navigating these near-term (2026) and medium-term (2027–2030) requirements, specialized platforms like Pathzero offer streamlined solutions to efficiently gather, verify, and report data, ensuring seamless adherence while minimizing operational disruptions.
For more details, visit CARB's climate disclosure program page or email climatedisclosure@arb.ca.gov. Stay tuned for further updates as rulemaking progresses.