Wondering about the status of the California Disclosure Laws? Here is an updated status and summary. If these laws impact your company, chances are you’ve been following this. If you haven’t been following this, I would encourage you to start watching what your competitors are doing and begin to align–even if just a little. (See my previous post about not having 100% certainty) Carbon disclosure capability is not something best accomplished as a sprint.

Current regulatory and practical timing/thinking:

1. The first report date for SB 261 (Climate-Related Financial Risk Act) is January 1, 2026 but the timing and enforcement will change depending on the outcome of the appeal and/or follow-on legislation.
   • Best practice is to align with a TCFD/ISSB-style risk report cadence and treat 2026 as the initial target year understanding enforcement may slip.
   • If you have already made qualifying claims or used offsets at any point in 2024 or later, you should have already have AB 1305-compliant disclosures online, and you should plan to update them at least annually and whenever material information changes.
2. Treat FY2025 as the first year covered for Scope 1 and 2; with an emissions report due sometime in 2026, once CARB sets a specific date.
3. Treat FY 2026 as the first covered year for Scope 3, with reporting in 2027, again subject to exact dates in the final regulations.
4. Expect phased assurance, with early years focusing on limited assurance and “good faith” efforts, but still assume public, investor-relevant disclosure of full Scope 1-3.

California Climate Law Summaries

Summary of SB 261-Climate-Related Financial Risk Act (as of Nov 25, 2025)

• Who’s covered: Entities with greater than $500 million in total annual revenues doing business in California (with some carve outs like insurers)

• By When: Statutory timing: First climate-related financial risk report is due by Jan 1, 2026, then every two years thereafter.

• What’s covered: Covered entities must identify material climate-related financial risks (physical and transition) as well as describe measures adopted to reduce or adapt to those risks on a public website. Reporting is expected to align broadly with TCFD-style/ISSB-style frameworks (governance, strategy, risk management, metrics and targets).

• Litigation/injunction impacts: Statutory first-report due January 1, 2026, then biennially. The deadline is still the text of the law, it is currently enjoined. Enforcement is paused pending litigation so the dates are planning markers, not enforceable deadlines (for now).

Summary of SB 253-Climate Corporate Data Accountability Act (as of 11/25/2025)

• Who’s covered: Companies with more than $1 billion in total annual revenue that are “doing business in California.” Applies to both U.S. and non-U.S. companies meeting the threshold and nexus.

• By When: CARB must finalized regulations (originally Jan 1, 2025 now delayed in practice). Scopes 1 & 2: First reports cover fiscal years beginning on or after Jan 1, 2025. Disclosures are due in 2026 (exact calander date to be set by CARB regs). Scope 3: First reports cover fiscal years beginning on or after Jan 1, 2026. Disclosures are due in 2027 (date also to be set in regs)

• What’s covered: 1) Annual GHG emissions disclosure; 2) Phased assurance;3) CARB rulemaking and oversight

• Annual GHG emissions disclosure: Must report Scope 1, 2 and Scope 3 emissions. Scopes must be calculated in line with the GHG Protocol (or similarly accepted standards once CARB finalizes regulations). Reports must be filed with a CARB-designated emissions reporting organization and made publicly available online.

• Phased assurance: Third party assurance is required for reported emissions, starting with limited assurance for Scope 1-2 and then moving toward reasonable assurance over time. Scope 3 assurance is phased in later and at a lower standard initially.

• CARB rulemaking and oversight: CARB is tasked with adopting implementing regulations (including definitions, methodologies, reporting format and assurance requirements) and may impose administrative penalties for non-compliance, subject to statutory caps.

• Litigation and enforcement status: (as of 11/25/2025): SB 253 has been challenged in federal court, alongside SB 261, on constitutional grounds (compelled speech/First Amendment, etc.) The Ninth Circuit has allowed SB 253 to move forward (no current injunction blocking enforcement) while SB 261 is preliminarily enjoined. CARBs rulemaking has slipped past the original date, so exact filing deadlines and some details are still pending in final regulations.

Summary of AB 1305-Voluntary Carbon Market Disclosures Act (offsets/climate claims)

• Who is covered: Entities doing business in or making claims that: (treated as 3 independent buckets): 1) Market or sell voluntary carbon offsets (VCOs) in California; 2) Purchase/use VCOs and make net-zero/carbon-neutral/significant emissions-reduction claims about the entity or its products; 3) Make net-zero/carbon-neutral/”significant emissions reduction” claims (even without offsets) reaching California.

• What’s covered: Must maintain detailed disclosures on a public website, tailored to which “bucket(s)” triggered. For example: 1) Project- and credit-level details for offsets (type, protocol, registry, quantities, dates). 2) How any “net zero, ” “carbon neutral,” or similar claims were determined and how progress is measured, including whether there is independent third-party verification.

• By When: Any covered entity that has been making offset-related/”net-zero/carbon neutral/major reductions” claims in CA should already have AB 1305-compliant pages live and be refreshing them annually.

• Penalties: Civil penalties up to $2,500 per day per violation, capped at $500,000 for missing or inaccurate website disclosures.

• Litigation/Enforcement Status: Unlike SB 253 and SB 261. AB 1305 has not been the subject of a dedicated legal challenge to date and there is no injunction pausing it. Non-compliance risks feeding collateral greenwashing-style consumer and securities litigation–even without AB 1305 itself being challenged.