California climate disclosure laws: what companies need to do now for SB 253 and SB 261 readiness
California Climate Disclosure
What companies need to do now for SB 253 and SB 261 readiness
California's climate disclosure laws create two distinct reporting tracks for large companies doing business in the state. SB 253 addresses greenhouse gas emissions. SB 261 addresses climate-related financial risk. They overlap, but they are not interchangeable — and their current implementation status should be checked separately.
Status as of 4 September 2026
CARB's published program materials say SB 253 covers annual Scope 1, 2 and 3 emissions reporting for qualifying entities. CARB also describes SB 261 as a biennial climate-risk reporting program, while official materials include a separate enforcement advisory. Verify the latest CARB and court status before relying on a deadline or enforcement statement.
The two laws at a glance
- SB 253 — Core disclosure: Scope 1, Scope 2 and Scope 3 greenhouse gas emissions
- SB 261 — Core disclosure: Climate-related financial risks and measures used to reduce or adapt to them
- SB 253 — Revenue threshold: More than $1 billion in total annual revenue
- SB 261 — Revenue threshold: More than $500 million in annual revenue
- SB 253 — Frequency: Annual
- SB 261 — Frequency: Biennial under the statute
- SB 253 — Primary workstream: Carbon accounting, controls and assurance readiness
- SB 261 — Primary workstream: Governance, risk assessment and public reporting
Start with four decisions
- 1. Determine which legal entity is being assessed. Map the U.S. parent, subsidiaries and reporting boundary before applying the revenue and California nexus tests. A company list or registration record can inform the analysis, but it should not replace the entity's own documented assessment.
- 2. Separate emissions reporting from climate-risk reporting. SB 253 requires an emissions inventory supported by repeatable data collection and calculation methods. SB 261 calls for a financial-risk narrative supported by governance and risk-management evidence. Treating both as one ESG report can leave important control gaps.
- 3. Build evidence, not just a final document. A defensible process retains source records, calculation workbooks, emission factors, organizational-boundary decisions, approvals and a change log. The report is the output; the evidence trail is what makes the output reviewable.
- 4. Design for annual reuse. Create named data owners, a reporting calendar, exception handling and sign-off steps. A one-time collection exercise becomes expensive and fragile when the next reporting period begins.
What should happen next?
- If coverage is uncertain, complete the California applicability assessment.
- If SB 253 likely applies, use the 2026 reporting checklist to identify evidence gaps.
- If value-chain emissions will be material, start supplier-data preparation before Scope 3 becomes a deadline-driven exercise.
- If climate-risk reporting is relevant, confirm the current SB 261 legal and enforcement status before setting the reporting calendar.
How GreenKPO supports readiness
GreenKPO can help turn a regulatory question into an operational workplan: map the reporting boundary, identify emissions-data owners, document calculation assumptions, prioritize evidence gaps and prepare teams for external review. Final legal conclusions should be confirmed with qualified counsel.
Common questions
- Does having customers in California automatically mean the laws apply?
Not necessarily. Coverage depends on the governing definition of doing business in California, the applicable revenue test, entity structure and any relevant exclusions. Document the analysis rather than relying on one fact in isolation. - Are small suppliers directly covered?
Many suppliers will fall below the statutory revenue thresholds. They may still receive emissions-data requests from covered customers preparing Scope 3 inventories. - Can one existing sustainability report satisfy both laws?
Existing disclosures may reduce duplication, but teams should map every requirement and evidence source explicitly. A report written for another framework is not automatically a complete California submission.
Assess your California reporting readiness
Bring your entity structure, current emissions inventory and reporting calendar to a focused GreenKPO scoping session.