(Updated after CARB guidance on September 11, 2026)
The California Air Resources Board (CARB) has officially approved the state’s climate disclosure laws SB 253 and SB 261. They continue to issue updated guidance for companies preparing to comply.
Key Takeaways
- SB 253 Scope 1 and 2 reports are due November 10, 2026. CARB's voluntary intake platform, reporting guidance, and instructional video launched September 1, giving companies their first clear picture of how to actually file.
- No assurance is required for the 2026 filing. Limited assurance on Scope 1 and 2 becomes required starting in 2027. Scope 3 carries no assurance requirement in 2027.
- The fee assessment date moved to December 10, 2026, alongside the deadline extension, with a 60-day window to pay. CARB's preliminary estimate is $3,000–$4,000 per entity (informational only, not finalized).
- SB 261 enforcement remains paused pending a Ninth Circuit Court ruling expected later in 2026, but companies are continuing to prepare and file voluntarily.
- The five proposed Scope 3 categories aren't rigid. Companies can exclude any that aren't material to their business and voluntarily report others that are.
SB 253: What's Required and When
SB 253 (the Climate Corporate Data Accountability Act) requires U.S.-based companies with more than $1 billion in annual revenue doing business in California to publicly disclose Scope 1, 2, and 3 greenhouse gas emissions.
Reporting Timeline
Who's Exempt
- Nonprofit and charitable organizations tax-exempt under the Internal Revenue Code
- Federal, state, and local government entities and majority government-owned companies
- Companies whose only California activity is wholesale electricity transactions
- Companies whose only California nexus is employee compensation or payroll, including remote workers
What "Doing Business in California" Means
CARB removed the earlier property-holdings and payroll criteria. The standard now is whether a company financially benefits from transactions in the state or is domiciled there. CARB released a preliminary list of covered entities in September 2025, but has confirmed this list is a rough estimate only, not a determination. Companies should independently assess whether they meet the revenue and California-nexus thresholds.
Which Fiscal Year to Report
Your reporting year for the first SB 253 filing depends on your fiscal year end:
- Fiscal year ending between January 1 and February 1, 2026: report emissions from the FY ending in 2026.
- Fiscal year ending between February 2 and December 31, 2026: report emissions from the FY ending in 2025.
How to Submit: CARB's September 1 Guidance
CARB's September 1 release finally answered the "how do we actually file" question. There are three acceptable submission paths, and CARB has not indicated a preference among them:
- CARB's voluntary intake platform – no account required; submit contact/billing information and Scope 1 + 2 data directly.
- An existing report or dataset – an annual report or data already submitted through another program or voluntary initiative.
- CARB's October 2025 draft template – remains voluntary for 2026.
If your company wasn't collecting Scope 1 and 2 data as of the December 5, 2024 enforcement notice, CARB requests a non-reporting statement on company letterhead instead. This carries reputational and contractual risk, since it signals a company is not yet tracking its emissions.
A few additional points from the guidance:
- A full sustainability report isn't required. A concise document with your Scope 1 and 2 emissions and company information satisfies the requirement.
- Submissions, whether through the portal or by email to climatedisclosure@arb.ca.gov, become public within 90 days of receipt.
- Fees: the assessment date moved from September 10 to December 10, 2026, to align with the new deadline. Entities have 60 calendar days to pay after assessment. CARB's preliminary, informational-only estimate is $3,000–$4,000 per entity.
Draft Scope 1 and 2 Reporting Template
CARB's October 2025 draft reporting template remains voluntary for 2026 but offers useful structure. It includes sections for:
- Organization information
- Third-party verification
- Inventory boundary
- Scope 1 and Scope 2 disclosure
- Methodology
- De minimis / minor sources
- California MRR fields (if applicable)
- Emission reductions (if applicable)
Companies can apply any of the GHG Protocol's three organizational boundary approaches, equity share, operational control, or financial control, provided the choice is disclosed and applied consistently. CARB is also seeking input on whether a single boundary method should eventually be standardized.
Assurance: What's Required, and When
- 2026: No assurance requirement. Report what you have as of the December 5, 2024 enforcement notice, whether that includes assurance or not.
- 2027: Limited assurance is required for Scope 1 and 2. Companies that already hold reasonable assurance (a higher standard) can submit that instead of arranging a separate limited-assurance engagement. Scope 3 carries no assurance requirement in 2027, though companies already obtaining it voluntarily can submit that too.
- 2030+: Assurance requirements are expected to move toward reasonable assurance for Scope 1 and 2, with Scope 3 assurance requirements still evolving.
Even though assurance isn't mandatory until 2027, treat 2026 as the year to build the underlying discipline: assign data owners, maintain methodology and change logs, and document estimates and exclusions. Assurance readiness is built through the reporting process itself, not added at the end of it.
Consolidated and Parent/Subsidiary Reporting
A parent may file one consolidated report for its subsidiaries, but this is a filing convenience, not a scope reducer:
- Applicability is determined per entity, regardless of corporate structure. Each entity independently checks the revenue and California-nexus thresholds.
- An in-scope subsidiary can satisfy its obligation through a parent's consolidated report, but remains individually responsible for compliance.
- First-year reports don't need to disaggregate California-specific data.
- Out-of-scope subsidiaries may be voluntarily included in a parent's report but are excluded from the fee calculation.
Scope 3 Phase-In and the Data Exclusion Provision
CARB's 2027 proposal phases in five categories rather than all fifteen: purchased goods and services (1), fuel and energy-related activities (3), waste generated in operations (5), business travel (6), and employee commuting (7).
It's not a rigid list: companies can exclude any of the five that aren't relevant, and voluntarily report others that are more material. There's no fixed exclusion percentage, CARB uses a principles-based approach (completeness, accuracy, relevance, transparency, consistency) instead of a bright-line cutoff.
The 5% Recalculation Threshold
If a future methodology, data, or boundary change shifts your total inventory more than 5% cumulatively from your base year, CARB's proposal would require recalculating prior years. This threshold applies to your entire inventory, not one scope or activity, so getting your first reporting year right matters more than it might seem.
Where CARB Still Has Work to Do
Open questions from the listening sessions (August 5–September 9, 2026), ahead of the fall rulemaking package:
- How a triggered recalculation actually gets applied: restating every intervening year, or just comparing against the base year
- Whether the 5% threshold is measured differently once Scope 3 joins the inventory in 2027
- Assurance provider qualifications and independence rules
- Required 2027+ data fields and reporting formats
SB 261: Climate-Related Financial Risk Disclosure
SB 261 requires companies with more than $500 million in annual revenue doing business in California to publicly disclose climate-related financial risks and mitigation strategies.
Litigation Status
The Ninth Circuit Court of Appeals paused SB 261 enforcement on November 18, 2025, and heard oral arguments in January 2026. Plaintiffs argue the law compels non-commercial speech; California argues the disclosures function as standard financial risk information for investors and lenders. A decision is expected in late 2026, with analysts estimating a high likelihood (80%+) that the stay will be reversed. SB 253 is unaffected by this litigation and continues on its original schedule.
Despite the pause, companies are continuing to prepare and voluntarily file. The public docket opened December 1, 2025, and submissions are ongoing.
What's Required
Companies must address five core areas, using any of the following frameworks: TCFD, IFRS S2, or a recognized framework from a regulated exchange or government entity. Each report needs a comply-or-explain statement identifying the framework used and any omissions.
- Reporting Framework – which framework was used and why
- Governance – oversight structures for climate-related financial risk, including board involvement
- Strategy – risks and opportunities across time horizons, and strategy resilience under future scenarios
- Risk Management – how climate risk is identified, assessed, and integrated into broader risk processes
- Metrics and Targets – what's used to track and manage material climate risk
Data flexibility: companies may use the most recent or best-available data, calendar-year or fiscal-year basis; many will use FY 2024 or FY 2023 data.
Scenario analysis: qualitative assessments are acceptable in the first reporting cycle; quantitative modeling is not required yet.
Emissions data: not required in the initial SB 261 report, to avoid duplicating SB 253.
Existing TCFD/ISSB reports: may satisfy SB 261 if published via the public docket with a comply-or-explain statement attached.
Exemptions: companies regulated by the California Department of Insurance or primarily engaged in insurance business, not-for-profits, and companies whose only California exposure is teleworkers.
Timeline of CARB's Climate Law Rulemaking
The California Legislature passed SB 253 and SB 261 in 2023, creating the most expansive climate disclosure laws in the country. SB 219, passed in August 2024, combined the two laws and gave CARB extra time to complete formal rulemaking.
- May 29, 2025 – First public workshop; over 3,000 participants. Workshop recording | Presentation slides.
- July 9, 2025 – Interim FAQ released. Since superseded, see the updated version below (November 17, 2025).
- August 21, 2025 – Second workshop. Recording | Presentation slides.
- October 10, 2025 – Draft Scope 1 and 2 reporting template and accompanying guidance memo released.
- November 17, 2025 – Updated FAQ on California Climate Disclosure Requirements and Climate-Related Financial Risk Report Checklist published.
- November 18, 2025 – Third workshop, updating definitions, exemptions, and deadlines. Recording | Presentation slides. Same day: Ninth Circuit pauses SB 261 enforcement.
- February 26, 2026 – Board approves the Initial Regulation, establishing fees and the first-year deadline. Press release.
- March 23, 2026 – Workshop on proposed GHG reporting requirements. Recording | Presentation slides.
- July 21, 2026 – Fifth workshop, previewing 2027+ regulatory concepts: Scope 1/2 assurance and the proposed Scope 3 approach. Presentation slides.
- August 5 – September 9, 2026 – Six sector-specific listening sessions.
- September 1, 2026 – New reporting guidance ("Guidance for SB 253 2026 Reporting Submittals"), a voluntary online intake platform, and an instructional video released.
- Fall 2026 (upcoming) – CARB expected to release the formal rulemaking package (staff report, notice of public hearing, proposed regulatory text), followed by a 45-day public comment period.
What Companies Should Do Now
- Confirm eligibility: over $1B in revenue for SB 253, over $500M for SB 261 (the lesser of the last two fiscal years).
- Choose your 2026 SB 253 submission path: CARB's intake platform, an existing report, or the draft template.
- Finalize your Scope 1 + 2 package: confirm fiscal-year selection, totals, emission factors, and supporting documentation.
- Run a public-filing review: separate your public submission from internal workpapers and remove commercially sensitive information before filing, since submissions become public within 90 days.
- Map all 15 Scope 3 categories: even though only five are proposed as required in 2027, identify which are material to your business now.
- Document your methodology: capture estimates, assumptions, boundaries, emission factors, and any changes, this matters more given the 5% recalculation threshold.
- Assess assurance readiness: identify evidence gaps and provider considerations well ahead of the 2027 requirement.
- For SB 261: compile your most recent climate-risk data, conduct a qualitative risk assessment against TCFD or ISSB, and prepare governance documentation, even while enforcement is paused.
Final Thoughts on Meeting California Climate Disclosure Requirements in 2026
CARB has now clarified the mechanics of the 2026 SB 253 filing: the intake platform is live, submission paths are flexible, and assurance won't block your first filing. The harder work, Scope 3 categories, assurance provider requirements, and exact 2027 data fields, is still being finalized through the fall rulemaking process.
Treat your 2026 filing as the foundation for everything that follows. Strong documentation and governance now will matter more once the 5% recalculation threshold and assurance requirements take effect in 2027.
At Good.Lab, we help companies build GHG measurement and reporting processes that hold up under CARB's requirements to comply with SB 253 & SB 261.
Talk to an expert to get started on your 2026 baseline.
