California passed SB 253 and SB 261 together as part of its broader Climate Accountability Package. The two laws target different kinds of disclosure, but both aim to make corporate climate risk more transparent, consistent, and investor-grade.
If your business is affected by one, it may very well be affected by the other. Understanding how these laws differ—and where they intersect—is critical to preparing your teams, timelines, and tools.
At a Glance: SB 253 vs SB 261
Category
SB 253
SB 261
Primary Focus
Greenhouse gas emissions disclosure
Climate-related financial risk disclosure
Threshold
Revenue > $1 billion
Revenue > $500 million
Frequency
Annually
Biennially
Start Year
2026 (Scope 1 & 2), 2027 (Scope 3)
2026
Key Standard
Greenhouse Gas Protocol
TCFD (Task Force on Climate-related Financial Disclosures)
Assurance Requirement
Yes (third-party audit)
No (self-published)
Applies to Private Companies?
Yes
Yes
Reporting Format
Filed to emissions reporting platform
Published on company’s website
Penalty Cap
$500,000/year
$50,000/year
What SB 253 Requires
SB 253, or the Climate Corporate Data Accountability Act, requires large companies to disclose their full greenhouse gas emissions footprint—Scopes 1, 2, and 3.
Scope 1: Direct emissions
Scope 2: Indirect emissions from purchased energy
Scope 3: All other indirect emissions, such as supply chain, product use, commuting, etc.
These disclosures must follow the GHG Protocol and be submitted through a state-designated platform, with third-party assurance required starting in 2026 for Scopes 1 and 2, and in 2030 for Scope 3.
What SB 261 Requires
SB 261 focuses on climate-related financial risks. Companies must disclose:
The risks climate change poses to their operations, supply chains, assets, and financial outcomes
What steps they are taking to reduce or adapt to those risks
Reports must follow the TCFD framework or an equivalent disclosure standard and be published on the company’s own website, not submitted to a central database.
No third-party audit or assurance is required, though incomplete reports must explain the gaps and outline steps toward full disclosure.
Who Needs to Comply with Each Law
Company Type
SB 253
SB 261
Public Companies
✅
✅
Private Companies
✅
✅
Global Companies with CA Operations
✅
✅
Insurance Companies
✅
❌ (Exempt from SB 261)
Companies under $500M Revenue
❌
❌
Important: Both laws apply to any company “doing business in California,” regardless of where it is headquartered.
Timelines and Reporting Frequency
SB 253 Timeline:
2025: CARB adopts final regulations
2026: Scope 1 and 2 emissions reporting begins
2027: Scope 3 emissions reporting begins
2030: Reasonable assurance begins for Scope 1 & 2; limited assurance for Scope 3
SB 261 Timeline:
2026: First report due (Jan 1)
2028, 2030, etc.: Reports required every two years
California’s enforcement approach focuses on timely and transparent disclosure, not perfection. But companies that ignore the requirements altogether will face significant financial and reputational risk.
Do These Laws Overlap?
Yes, but they serve complementary purposes.
SB 253 answers: What are your emissions?
SB 261 asks: How will climate risk affect your business?
One focuses on data. The other focuses on strategy.
Together, they create a dual lens—what your impact is on the climate (emissions), and how climate change impacts you (financial risk).
If you’re already preparing for one, building capacity for the other is a natural next step.
Preparing for SB 253 and SB 261?
Sprih helps companies:
Collect and verify Scope 1, 2, 3 data
Align with GHG Protocol and TCFD
Simplify internal coordination across sustainability, finance, and compliance
Publish investor-grade reports that meet California’s climate standards
FAQs
What is the difference between SB 253 and SB 261?
SB 253 requires companies to disclose their full greenhouse gas emissions footprint—Scopes 1, 2, and 3—based on the GHG Protocol. SB 261 requires companies to report on climate-related financial risks using the TCFD framework. One is about emissions data, the other is about risk strategy.
Can a company be required to comply with both?
Yes. If your company has over $1 billion in revenue and does business in California, you must comply with both SB 253 and SB 261. Companies with revenue between $500 million and $1 billion are only subject to SB 261.
Do these laws apply to non-California companies?
Yes. Any company “doing business in California”—regardless of where it’s headquartered—is in scope. That includes international firms with operations or customers in the state.
Are small or medium businesses affected?
No. SB 253 applies to companies with more than $1 billion in annual revenue. SB 261 applies to those with more than $500 million. Smaller companies are not required to comply under either law—at least for now.
Is assurance required for both laws?
No. SB 253 requires third-party assurance for Scope 1 and 2 emissions starting in 2026, and for Scope 3 starting in 2030. SB 261 does not require assurance, but companies must publish complete and clear risk reports aligned with TCFD or equivalent standards.
