California Senate Bill 253 – Climate Corporate Data Accountability Act

SB 253 requires large companies doing business in California to publicly disclose their greenhouse gas (GHG) emissions. The goal is to enhance corporate climate transparency and support California’s broader climate goals.

Who Must Comply?

U.S.-based public and private companies with annual revenues over $1 billion that operate in California.

Disclosure Requirements

•Scope 1: Direct emissions from owned or controlled sources.
•Scope 2: Indirect emissions from purchased electricity, steam, heating, or cooling.
•Scope 3: All other indirect emissions from the value chain (e.g., suppliers, product use, business travel).

Timeline

•2026: Scope 1 and 2 reporting begins (for 2025 data).
•2027: Scope 3 reporting begins (for 2026 data).

Verification and Assurance

• Limited third-party assurance required starting in 2026.
• Reasonable assurance required for Scope 1 and 2 emissions by 2030.
• Scope 3 subject to limited assurance after regulatory review.

Enforcement

• Administered by the California Air Resources Board (CARB).
• Fines up to $500,000 per year; Scope 3 penalties apply only for nonfiling through 2030.
• Public disclosure via a state-designated digital platform.

California Senate Bill 261 – Climate-Related Financial Risk Disclosure

SB 261 requires companies to disclose their exposure to climate-related financial risks and the measures they are taking to mitigate them. The law aims to support informed decision-making by investors and promote corporate resilience.

Who Must Comply?

Companies with annual revenues over $500 million doing business in California.(Insurance companies are excluded, as they are already subject to similar reporting.)

Disclosure Requirements

A biennial public report outlining:

• Physical and transition climate-related financial risks.
• Actions taken to manage or reduce those risks.

Standards

Reports must align with frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD).

Timeline

• First report due: January 1, 2026.
• Subsequent reports: Every two years.

Enforcement

• Oversight by CARB.
• Penalties up to $50,000 per year for non-compliance or inadequate reporting.
• Reports must be publicly posted on the company’s website.

Why These Laws Matter

Together, SB 253 and SB 261 form the first U.S. state-level corporate climate accountability framework to mandate both emissions transparency and climate risk disclosure. They are expected to drive innovation in corporate sustainability practices and influence federal and international climate reporting standards.

References:

• FAQs on the Corporate Sustainability Due Diligence Directive

• Sustainability Due-Diligence