Chapter 06 · Governance & regulationRegulation & International Instruments
California climate disclosure laws (SB 253 / SB 261)
Definition
Two California laws signed in October 2023 (amended by SB 219 in 2024) establishing the first broad US corporate climate-disclosure regime. SB 253 requires companies with over US$1 billion in revenue doing business in California to report Scope 1, 2 and 3 greenhouse-gas emissions with phased assurance. SB 261 requires companies with over US$500 million in revenue to publish biennial climate-related financial risk reports aligned with TCFD-style frameworks.
References
Signing and SB 219 amendments; CARB 2025–26 workshops; Feb 2026 board approval; June 2026 withdrawal and deadline-shift proposal; Ninth Circuit injunction status; 2027 Scope 3 and assurance proposals; penalty levels; ~5,400 covered-entity estimate.
July 2026 modified regulation and 15-day comment period.
Overview
What it means
The laws extend disclosure duties to thousands of companies — CARB has estimated roughly 5,400 entities under SB 253 — based on doing business in California rather than listing status.
Implementation has been turbulent: CARB's initial regulation was approved by its board in February 2026, then withdrawn in June 2026 with a proposal to move the first Scope 1 and 2 deadline from 10 August to 10 November 2026, followed by a modified regulation and further comment period in July 2026; proposals for 2027 phase in five Scope 3 categories with limited assurance under recognised assurance standards.
SB 261 enforcement was stayed by a Ninth Circuit injunction (November 2025) in the US Chamber of Commerce challenge, unresolved as of mid-2026. Penalties can reach $500,000 (SB 253) and $50,000 (SB 261) per reporting year; CARB signalled good-faith-enforcement leniency for first-year Scope 1 and 2 reports.
How it is used
Companies map in-state nexus, build emissions-inventory and assurance readiness, and monitor CARB rulemaking; the laws are the benchmark against which other US state proposals and federal inaction are measured, and a compliance bridge toward ISSB-style reporting.
Why it matters
With federal US climate disclosure stalled, California's laws — covering much of the US economy by revenue — are the functioning centre of American corporate climate disclosure and a live test of state-level regulatory power.
Definitions and controversy
Statutory thresholds, deadlines and litigation status were in flux through 2026; this entry reflects the position as at August 2026 and should be refreshed as CARB rulemaking and the Ninth Circuit case conclude.