As you likely heard, California enacted climate disclosure laws that impact companies doing business in the state. On August 21, the California Air Resources Board (CARB) hosted their second public workshop for stakeholders, the reporting requirements are still a work-in-progress, which provided additional clarifications and guidance for companies to prepare for the inaugural reporting deadlines in 2026. CARB will continue to solicit feedback on assurance standards and definitions that determine applicability through September 11, and expect to publish the draft rules for public comment on October 11, before releasing their final rules by the end of 2025.

When finalized, the laws' reporting rules will appear in Sustainability Explorer, where you can browse and bookmark their content and connect them to related metrics in Sustainability Program. However, now's the time to get a jumpstart to prepare your company for the upcoming legislation — especially given their impending deadlines in 2026!

Climate-Related Financial Risk Act (SB 261)

The Climate-Related Financial Risk Act — or Senate Bill 261 (SB 261) — requires companies with at least $500M in annual revenue doing business in California to publicly disclose their climate-related risks and mitigation strategy every two years, starting January 1, 2026. To reduce the burden for this first year, CARB has indicated that minimum reporting requirements will be acceptable. For 2026, no emissions disclosures or scenario analysis are required, and companies can use reasonably-available data, representing either 2023/2024 or 2024/2025 activity. Note that these allowances apply only to 2026 reporting, and future reporting years will have more robust requirements.

To identify your climate-related risks in compliance with SB 261, you can use either the Task Force on Climate-related Financial Disclosures (TCFD) or International Financial Reporting Standards (IFRS) S2: Climate-related Disclosures — both of which are available in Sustainability Explorer.

Climate Corporate Data Accountability Act (SB 253)

The Climate Corporate Data Accountability Act — or SB 253 — requires companies with at least $1B in annual revenue doing business in California to report their Scope 1 and 2 emissions and obtain limited assurance by a proposed deadline of June 30, 2026 for fiscal year 2025; Scope 3 emissions will follow in 2027 for FY2026. While CARB will post draft templates for Scope 1 and 2 reporting for public opinion in September, your company can begin to calculate its emissions inventories in Carbon and collect related values in Sustainability Program now, to accommodate the required assurance timelines.