On February 26, 2026, the California Air Resources Board (CARB) took a significant step by approving regulations tied to California’s climate disclosure laws, following a proposal made in December 2025. These regulations stem from Senate Bills 253 and 261, which compel businesses with substantial revenues to report their greenhouse gas emissions.
Here’s a quick look at the key points:
SB 253 mandates that U.S. companies earning over $1 billion annually and operating in California must report their Scope 1 and Scope 2 emissions by August 10, 2026. Scope 3 emissions must be reported starting in 2027.
SB 261 requires companies earning over $500 million to report climate-related financial risks every two years.
Both bills are designed to enhance transparency about companies’ environmental impacts. As part of these regulations, CARB defined essential terms like “doing business in California” and how revenue is calculated.
Some recent statistics indicate that awareness of climate-related risks among U.S. companies is increasing. A survey by PwC found that 85% of executives view climate change as a risk that needs prioritized action. This reflects a growing trend among businesses to adapt to climate regulations.
However, it’s important to note that legal challenges face both SB 253 and SB 261. The U.S. Chamber of Commerce has sued CARB, arguing that these laws might violate the First Amendment. While the court has allowed SB 253 to proceed, SB 261 is currently under an injunction.
As these laws develop, companies need to prepare proactively:
Assess Impact: Determine if your company falls under these regulations and evaluate readiness.
Conduct Analysis: Review current greenhouse gas reporting processes to identify any gaps, especially for Scope 3 emissions.
Engage Early: Collaborate with teams within your company to ensure compliance and data collection.
Stay Updated: Monitor developments in climate disclosure legislation, as other states, like New York, are following California’s lead.
In conclusion, California’s proactive stance on climate disclosure is shaping how companies address environmental responsibility. Organizations must adapt to these evolving regulations to mitigate risks and meet compliance requirements effectively. For more detailed context and guidance, you can explore CARB’s official updates on climate disclosure here.
