What is SB 261?

SB 261 requires companies to identify, assess, and disclose climate-related financial risks using the TCFD framework (Task Force on Climate-Related Financial Disclosures).

You’ll need to explain how climate change could impact your company’s strategy, operations, and financial performance — and how you’re planning to respond.

You Must Report On	What It Means
Governance	Who in your company is responsible for managing climate-related risks and opportunities.
Strategy	How identified risks and opportunities could affect your business model, strategy, and financial planning.
Risk Management	How you identify, assess, and manage climate-related financial risks.
Metrics	The key metrics and targets you use to track and manage those risks and opportunities.

Who is it for?

Covered Companies

U.S. and multinational firms doing business in California with over $500M in annual revenues.

Applies regardless of whether your headquarters is in California or outside.

Reporting Cadence

Reports due every two years starting January 1, 2026.

Timeline

You Must Report On	What It Means
Governance	Who in your company is responsible for managing climate-related risks and opportunities.
Strategy	How identified risks and opportunities could affect your business model, strategy, and financial planning.
Risk Management	How you identify, assess, and manage climate-related financial risks.
Metrics	The key metrics and targets you use to track and manage those risks and opportunities.

What You’ll Need to Report Under SB 261

Theme	What You Must Disclose
Governance	Oversight of climate risks at the board and management level.
Strategy	Short-, medium-, and long-term financial impacts of climate risks and opportunities.
Risk Management	Processes to identify and manage climate-related risks, including integration with enterprise risk management.
Metrics and Targets	GHG emissions (direct and indirect where relevant), financial exposure metrics, and resilience planning targets.

What Do the Climate Experts Say?

Check out our blogs for deeper insights into SB 261 and related disclosure frameworks.

SB 253 assurance requirement for Scope 1, 2, 3 emissions with timelines and provider criteria

What is California’s SB 261?

6 min read

Impact of California climate laws SB 253 and SB 261 on corporate reporting and compliance

California Climate Disclosure Laws: 5 Steps to Get Audit-Ready

6 min read

What SB 261 Means for Climate Risk Disclosures

6 min read

Where Are You Likely to Face Issues?

Fragmented Risk Data

Pulling financial exposure, climate models, and scenario analyses into one consistent view.

Scenario Analysis Complexity

Running multiple scenarios (2°C, 4°C pathways) and quantifying business impacts.

Governance Alignment

Getting board and executive teams aligned on climate oversight and disclosure.

Investor Scrutiny

Preparing for investor and regulator review of public risk disclosures.

Integration with SB 253

Ensuring your financial risk reporting is consistent with your emissions disclosures under SB 253.

Staying Ahead

Keeping up with the other evolving regulations and upcoming laws or changes

What Should Be Your Next Steps?

Map Your Financial Risk Exposures

Identify where climate risks (transition and physical) hit hardest in your supply chain, operations, and financial statements.

Align with TCFD Best Practices

SB 261 is modeled on TCFD. If you’re not aligned yet, start by structuring governance, strategy, risk, and metrics accordingly.

Build Scenario Analysis Capacity

Develop the ability to stress-test your business under multiple climate scenarios — regulators will expect this.

Connect SB 261 & SB 253

Treat them as a package: SB 261 disclosures should be consistent with your emissions reporting under SB 253.

AI Agents Built for CSRD. Tailored to You.

RiskSense

RiskSense

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AuditSense

AuditSense

No scrambling. No gaps. Your disclosures stand up to scrutiny.

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ReportSense

ReportSense

The report writes itself. Investor-ready, regulator-ready; built automatically from your data.

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ComplianceSense

ComplianceSense

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KnowledgeSense

KnowledgeSense

To keep you updated on new laws, standards, and trends.

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Still Confused? Talk to our experts.

Connect with our experts if:

You need a clear, practical breakdown of SB 261 and its overlap with SB 253.
You want to identify how climate risks could affect your specific industry and company.
You’re trying to integrate TCFD-style reporting into existing risk management systems.

Whether you're just getting started or refining what you already have, we’ll help you make sense of the requirements and move forward with clarity.

All About SB 261

Clear. Practical. Actionable.

What is SB 261?

Who is it for?

Covered Companies

Reporting Cadence

Timeline

What You’ll Need to Report Under SB 261

What Do the Climate Experts Say?

Where Are You Likely to Face Issues?

Fragmented Risk Data

Scenario Analysis Complexity

Governance Alignment

Investor Scrutiny

Integration with SB 253

Staying Ahead

What Should Be Your Next Steps?

Map Your Financial Risk Exposures

Align with TCFD Best Practices

Build Scenario Analysis Capacity

Connect SB 261 & SB 253

AI Agents Built for CSRD. Tailored to You.

Still Confused? Talk to our experts.

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