Governance & Policy
California SB 261 — Climate-Related Financial Risk Act
Definition
California Senate Bill 261, the Climate-Related Financial Risk Act, enacted in 2023, requires US entities with over five hundred million dollars in annual revenue doing business in California to publish, every two years, a report disclosing climate-related financial risk consistent with TCFD-style frameworks and the measures adopted to reduce and adapt to that risk.
References
Scope, thresholds and litigation status
Disclosure framework referenced by the law
Current injunction and enforcement status
Overview
What it means
Climate-risk disclosure has arrived at state level for a broad tier of companies, although a Ninth Circuit injunction currently prevents enforcement while the legal challenge proceeds.
How it is used
Companies prepare TCFD-aligned risk reports and monitor the Ninth Circuit litigation; CARB accepts voluntary submissions in the interim.
Why it matters
Together with SB 253 it forms California's climate accountability package, the de facto US disclosure regime in the absence of a federal rule.
Current status note
Status checked on 19 August 2026: a Ninth Circuit injunction prevents enforcement pending appeal. CARB says it will announce a reporting deadline if the injunction is lifted.