California’s climate disclosure laws—SB 253 (Corporate Data Accountability Act) and SB 261 (Climate-Related Financial Risk Act)—moved from theory to real operational setup in late February 2026, when the California Air Resources Board (CARB) approved an initial regulation to stand up the programs, fund them, and lock in key administrative definitions and timelines.
Below is a practical update on what’s new, what’s still uncertain, and how to get in front of the 2026–2027 compliance curve.
What’s New: CARB Adopted “Initial Regulations” (Fees + Definitions + First Deadline)
At its February 26, 2026 public hearing, CARB approved an “Initial Regulation” that does three high-impact things:
- Establishes an annual fee structure to fund program administration
- Defines key applicability terms (including “revenue,” “doing business in California,” and certain exemptions)
- Sets the first SB 253 reporting deadline: August 10, 2026 — with first-year reporting limited to Scope 1 and Scope 2
CARB also signaled it will run a separate rulemaking covering GHG reporting requirements for 2027 and beyond, including assurance requirements.
SB 253: Emissions Disclosure (Who’s In + What’s Due)
Who is covered
SB 253 applies to U.S. entities “doing business in California” with more than $1 billion in annual revenue (as defined in the regulation).
What is due in 2026
- Deadline: August 10, 2026
- Content (first year): Scope 1 and Scope 2 only
- Reporting year mechanics: CARB’s framework ties the “covered period” to fiscal year-end timing (especially important for non-calendar fiscal years)
What’s coming next (and why 2026 is the “systems build” year)
Statutorily, SB 253 expands to include Scope 3 starting in 2027. CARB has indicated additional rulemaking is forthcoming for 2027+ reporting mechanics and assurance.
SB 261: Climate-Related Financial Risk Disclosure (Status + What to Do During the Stay)
SB 261 applies to U.S. entities doing business in California with more than $500 million in annual revenue (as defined). However, CARB is not currently enforcing SB 261 due to a court order, meaning reporting is voluntary for now.
Even with enforcement stayed, CARB notes that companies have been voluntarily submitting climate-risk reports via a public docket and is emphasizing compliance support and “good faith” approaches.
Practical takeaway: Treat 2026 as your dry-run year for SB 261 governance—board oversight, scenario framing, and controls for climate-risk narratives—so you’re not building the airplane mid-flight if/when enforcement resumes.
Applicability: The Definitions Matter (And They’re More Operational Than They Look)
The initial regulation isn’t just paperwork—it hardens edge cases that can change who is in scope:
- Revenue: Tied to California “gross receipts” concepts and evaluated against prior-year thresholds, which can trip up multi-entity structures
- “Doing business in California”: Defined using California tax code concepts and thresholds (not simply “we have customers there”)
- Recordkeeping: In-scope entities must retain records supporting “revenue” and “doing business” determinations and provide them upon request
- Consolidation: Parent-level consolidated reporting is permitted in defined circumstances—critical for corporate groups deciding how to structure submissions
Fees: Plan for Annual Invoices (Even When Reporting Is Biennial)
A key operational change: CARB’s initial regulation sets up annual fees to fund administration.
That includes SB 261, even though SB 261 reporting is biennial. CARB’s approach is effectively per-entity, and total fees depend on how many legal entities in a group are in scope, even if you plan to submit a single consolidated report.
Litigation: Rules Are Moving Forward, But the Risk Posture Is Real
These laws remain subject to ongoing litigation. Notably:
- SB 261 enforcement is currently paused (court order)
- SB 253 timelines continue to advance
Risk-managed approach: Proceed as if SB 253 deadlines will hold (because they are holding), and build SB 261 readiness in parallel with a “comply if/when enforceable” posture.
What to Do Now: A Controls-First Implementation Checklist (Audit-Ready)
If you want an audit-ready path—and to avoid a last-minute scramble—prioritize:
1) Confirm in-scope status (document it)
Run a documented test of:
- “Doing business in CA” thresholds
- Revenue / gross receipts thresholds
- Entity mapping (which legal entities are in scope and why)
2) Stand up an SB 253 Scope 1 & 2 program (2026 deliverables)
- Define your inventory boundary (equity share vs. control)
- Assign data owners and establish data collection workflows
- Select a calculation approach aligned to accepted protocols
- Build evidence files + retention from day one (treat like financial reporting support)
3) Decide your consolidation strategy
Determine parent-level vs. entity-level reporting, based on:
- Corporate structure
- Administrative burden
- Fee implications
- Governance and sign-off pathways
4) Start Scope 3 readiness in 2026
Even if 2026 submission is Scope 1–2 only, 2027 Scope 3 typically requires:
- Supplier/customer data architecture
- Contracting + survey strategy
- Controls, QA, and documentation standards
5) SB 261: Draft your climate-risk report under voluntary conditions
Use 2026 to pilot:
- Governance and board oversight
- Scenario framing
- Risk taxonomy
- Narrative controls (to avoid rushed public statements later)
Bottom Line
CARB’s February 2026 action turns California’s climate disclosure laws into an operational compliance program with real dates, definitions, and funding mechanics.
- SB 253 is the immediate driver: August 10, 2026 (Scope 1 & 2)
- SB 261 is partially paused, but still very alive from a governance and disclosure-risk perspective