SB 253 vs SB 261 is the critical comparison for businesses navigating California’s Climate Accountability Package, which introduced two distinct disclosure laws aimed at making corporate climate risk transparent 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
Here’s a quick SB 253 vs SB 261 side-by-side overview to help companies identify compliance obligations:
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?
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
Sprih helps businesses understand SB 253 vs SB 261 requirements, streamline compliance, and prepare accurate reports that meet California’s climate standards.
FAQs
What is the fundamental difference in purpose between SB 253 and SB 261?
SB 253 focuses on corporate impact on the climate, requiring disclosure of greenhouse gas emissions (Scopes 1, 2, and 3) using the Greenhouse Gas Protocol; SB 261 addresses the climate’s impact on the company by requiring reports on financial risks posed by climate change following the TCFD framework.
How do the revenue thresholds differ between SB 253 and SB 261?
SB 253 applies to companies doing business in California with more than $1 billion in global annual revenue, whereas SB 261 applies to those with over $500 million in annual revenue.
What is the reporting frequency required under each law?
Under SB 253 companies must submit annual emissions reports; under SB 261, a climate-related financial risk report is required every two years starting in 2026.
When must the first disclosures be submitted under SB 253 and SB 261?
SB 253 requires Scope 1 and 2 emissions reporting in 2026 based on fiscal year 2025 data, with Scope 3 starting in 2027; SB 261 mandates its first risk report by January 1, 2026 (covering fiscal 2025), then biennially.
Are there different penalties for non‑compliance under SB 253 versus SB 261?
Yes. Violations of SB 253 can result in civil penalties up to $500,000 per year for missing, late, or inaccurate emissions disclosures; SB 261 penalties are capped at $50,000 annually for inadequate or absent risk reports.
Do both laws require third‑party assurance of disclosures?
SB 253 mandates third-party verification—limited assurance for Scope 1 and 2 from 2026 and potentially Scope 3 by 2030. SB 261 does not itself require assurance, although risk reports including emissions descriptions or voluntary mitigation measures may be subject to SB 253 assurance standards.
How are SB 253 and SB 261 complementary in corporate climate reporting?
Emissions data produced under SB 253 can feed into risk analyses required by SB 261—creating a synergy where greenhouse gas disclosures inform financial risk assessments that are aligned with TCFD standards.
