Does SB 253 apply to my company
A useful applicability assessment answers more than whether consolidated revenue exceeds a headline threshold. It identifies the entity being tested, the reporting boundary, the California connection, the data used and any assumptions that still require legal interpretation.
Important disclaimer
Last reviewed: 16 September 2026
This is an operational screening guide, not legal advice. It does not decide the legal obligation. Applicability can be fact-specific. Confirm uncertain or material conclusions with qualified counsel, and check CARB’s corporate greenhouse gas reporting program page and rulemaking status page for definitions and timing.
SB 261 addresses climate-related financial risk reporting. CARB’s published SB 261 enforcement advisory states that it will not enforce the 1 January 2026 reporting deadline following a court injunction. Check current CARB guidance and legal developments before setting a reporting calendar. GreenKPO supports emissions data and evidence that may inform wider disclosure work; it does not replace climate-risk assessment or legal advice.
Quick screening logic
- Is the relevant business entity formed in the United States?
If yes: Continue to the revenue and California tests. If no or unclear: Review the exact statutory and regulatory entity definition with counsel. - Does total annual revenue exceed $1 billion?
If yes: Assess potential SB 253 and SB 261 coverage. If no or unclear: Continue — SB 261 may still be relevant above $500 million. - Does annual revenue exceed $500 million?
If yes: Assess potential SB 261 coverage. If no or unclear: Direct coverage may be less likely; supplier requests may still matter. - Does the entity do business in California?
If yes: Document the nexus and check current CARB definitions. If no or unclear: Do not assume; investigate registrations, operations and revenue connections. - Is a parent or subsidiary already reporting?
If yes: Map whether consolidated reporting affects the entity. If no or unclear: Define who owns the reporting obligation and data.
Step 1: define the entity and reporting boundary
List the legal entity, ultimate parent, relevant subsidiaries and fiscal year. Record whether revenue is measured at entity or consolidated level under the current rule. Keep the organizational chart and the source used for each conclusion.
Step 2: evidence the revenue test
Record the revenue figure, currency, accounting period and source document. If acquisitions, discontinued operations or differing fiscal years complicate the number, log the issue for finance and legal review.
Step 3: evidence the California nexus
Review current CARB definitions and guidance. Relevant evidence may include state registrations, operations, employees, property, contracts or California-source revenue, but no single checklist substitutes for the governing rule.
Step 4: test each law separately
A company can be above the SB 261 threshold but below the SB 253 threshold. Emissions reporting and climate-risk reporting also rely on different teams, evidence and review processes.
Step 5: check exclusions and parent / subsidiary treatment
Do not treat a revenue threshold alone as a final coverage decision. Check applicable exclusions and how parent or subsidiary treatment works under the current rules. Record which entity is being tested, whether consolidated reporting is relevant, who owns the data, and which CARB or statutory source you used. Escalate material or unclear conclusions to counsel.
Step 6: record the decision
- Entity: Legal name, jurisdiction, parent and subsidiaries considered
- Revenue: Period, amount, currency, source and consolidation approach
- California nexus: Facts assessed and controlling guidance used
- Conclusion: In scope, out of scope or further advice required — for each law
- Owner and date: Approver, review date and next scheduled refresh
If SB 253 likely applies
Prepare the evidence pack and move into a controlled Scope 1/2 reporting workflow.
If you are unsure
Turn entity, revenue and nexus facts into a documented decision record and readiness plan.
Discuss your reporting data readiness →Common questions
How do parent and subsidiary structures affect the analysis?
Map which legal entity is being tested, whether consolidated reporting is relevant, and who owns the data. Parent/subsidiary conclusions are often fact-specific — confirm with counsel when material.
Which fiscal year should we use?
Document the accounting period used for the revenue test and for emissions data. If fiscal years differ across entities or acquisitions, log the issue for finance and legal review.
What does “doing business in California” require?
Use current CARB definitions and guidance — not a single informal checklist. Registrations, operations, employees, property, contracts or California-source revenue may be relevant evidence.
What about first-year reporting?
Confirm the latest CARB instructions for Scope 1/2 timing and any enforcement posture before setting deadlines. Use the SB 253 readiness checklist for operational preparation.
What if we are below the thresholds?
Direct coverage may be less likely, but covered customers may still request supplier emissions data for their Scope 3 inventories. See the supplier data guide.
Discuss your reporting data readiness
Bring your entity structure, revenue information and California business details. We can help organise the information and identify data gaps for your finance team and legal advisers to review.