California climate disclosure laws are no longer on the horizon. The California Air Resources Board (CARB) approved its initial regulation on February 26, 2026 — and the first reporting deadline under SB-253 is August 10, 2026. If your company does business in California and earns over $1 billion in annual revenue, the California climate disclosure laws apply to you whether or not you have a physical office in the state.
This guide breaks down exactly what the California climate disclosure laws require, who falls under their scope, and the five steps your compliance team needs to take before the deadline.
California passed three landmark disclosure laws in October 2023. Together, they form the most comprehensive mandatory corporate climate reporting framework in the United States.
SB-253 — the Climate Corporate Data Accountability Act — requires companies to disclose Scope 1, 2, and 3 greenhouse gas (GHG) emissions using the GHG Protocol Corporate Standard.
SB-261 — the Greenhouse Gases: Climate-Related Financial Risk Act — requires disclosure of climate-related financial risks using the TCFD framework, or an equivalent. Note: enforcement is currently on hold while a Ninth Circuit appeal is pending.
AB-1305 — the Voluntary Carbon Market Disclosures Act — requires companies making net-zero or emissions reduction claims in California to back those claims with granular, verifiable data. Reporting was due January 1, 2024, so if you haven’t addressed this, you’re already late.
Both SB-253 and SB-261 were amended by SB-219 in September 2024 and incorporated into the California Health and Safety Code. The regulation CARB approved in February 2026 provides the formal implementation rules — covering definitions, scoping, and fees — that companies have been waiting on.
Scope is broader than most compliance teams initially assume.
SB-253 applies to your company if:
SB-261 applies if the revenue threshold is $500 million, with the same California nexus requirement.
AB-1305 applies regardless of company size — to any entity marketing or selling voluntary carbon offsets in California, or making net-zero or significant GHG reduction claims within the state.
Exemptions are narrow. Non-profits, government entities, insurance companies regulated by the California Department of Insurance, and companies whose only California presence is remote employees are exempt. Everyone else should assume they’re in scope and verify from there.
Important: CARB confirmed that ‘total revenue’ is calculated using gross receipts as defined under the California Revenue and Taxation Code — not GAAP net revenue. This distinction changes the math for some companies.
SB-253 requires disclosure of all three GHG emission scopes under the GHG Protocol. The reporting schedule is phased.
Scopes 1 and 2 emissions — due August 10, 2026 Companies will report using their 2025 fiscal year data. If your fiscal year ends between January 1 and February 1, you’ll use 2026 fiscal year data instead.
Scope 3 emissions — due 2027 The exact date is still to be confirmed. CARB is required to consider both supplier data collection timelines and third-party assurance capacity when setting it.
Reports are submitted to CARB’s digital reporting platform — not published on your company website. CARB has published a draft reporting template for Scopes 1 and 2 that companies can use voluntarily for 2026 reporting. It includes granular data fields by source and gas type.
If disclosures are made at the parent company level, subsidiaries in scope of SB-253 do not need to file separately. A non-US parent can submit a consolidated report covering all in-scope US subsidiaries.
Assurance requirements under the California climate disclosure laws are graduated:
CARB will exercise enforcement discretion in year one on assurance. Companies can report data that was available or being collected as of December 5, 2024, regardless of assurance status.
SB-261 requires biennial disclosure of climate-related financial risks and risk mitigation measures, structured around four components: governance, strategy, risk management, and metrics and targets.
As of December 2025, CARB issued an Enforcement Advisory stating it will not enforce the January 1, 2026 reporting deadline while a legal challenge is pending in the Ninth Circuit Court of Appeals. Compliance is currently voluntary.
That said, companies choosing to voluntarily report under SB-261 can upload a statement and report URL to CARB’s public docket. CARB has also confirmed that compliance with IFRS Sustainability Disclosure Standards is an acceptable alternative to TCFD.
Even with enforcement halted, the underlying obligation remains. Once the legal challenge resolves, enforcement can resume. Companies that have not started their TCFD-aligned reporting programs are taking a real risk.
AB-1305 is the law with the earliest deadline — January 1, 2024 — and the widest net. It covers any company operating in California that:
Required disclosures are detailed: project-level information, third-party verification status, calculation methodologies, and accountability mechanisms if offset projects fail to deliver.
Penalties for AB-1305 violations are assessed per day: $2,500 per violation, up to $500,000 in total. They are recovered in civil action, not through CARB. Companies that have made net-zero claims in California marketing materials without backing them up should review their position now.
California climate disclosure laws require action across multiple functions — sustainability, finance, legal, and procurement. Here is where to start.
1. Confirm you’re in scope. Map your California revenue against the $757,070 threshold. Verify entity structure against the law’s defined entity types. Don’t assume holding companies or passive entities are excluded without checking.
2. Stand up your GHG data collection process. Scopes 1 and 2 must be reported using 2025 fiscal year data. If you aren’t collecting utility, fuel, and refrigerant data systematically, start now. CARB’s December 2024 Enforcement Notice gives first-year good-faith latitude, but that latitude has limits.
3. Map your Scope 3 supplier data gaps. Scope 3 reporting is due in 2027. That sounds distant — but mapping 15 GHG Protocol categories across a global supply chain, resolving data quality issues, and getting data into a format that supports limited assurance takes 12 to 18 months at minimum.
4. Review your carbon offset claims. If your marketing or annual reports include net-zero language directed at California, confirm AB-1305 disclosures are in place. This isn’t a grace-period situation. The law has been in effect since 2024.
5. Align your reporting structure with your parent entity. If your global parent is filing consolidated GHG reports under another framework (CDP, ISSB, CSRD), assess whether those reports can satisfy California’s requirements. Parent-level filing is permitted — but the data must meet SB-253’s GHG Protocol specifications.
The financial exposure is meaningful.
| Law | Violation | Maximum Penalty |
|---|---|---|
| SB-253 | Non-filing, late filing, or failure to meet requirements | $500,000 per year |
| SB-261 | Failure to publish or publishing an inadequate report | $50,000 per year |
| AB-1305 | Each day information is unavailable or inaccurate | $2,500/day, up to $500,000 |
For SB-253, there is no penalty for Scope 3 misstatements made in good faith on a reasonable basis. Between 2027 and 2030, Scope 3 penalties apply only to non-filing.
CARB will consider good-faith compliance efforts when imposing penalties — but that is not an indefinite pass. The good-faith window is explicitly tied to the first reporting year.
Sprih is built for exactly this kind of compliance pressure. SustainSense, Sprih’s AI-native intelligence engine, processes 300,000+ sustainability reports across 120,000+ companies and extracts supplier-specific emission data — the kind of data that SB-253 Scope 3 reporting actually requires.
Most companies trying to meet California’s GHG reporting deadlines hit the same wall: supplier data. Spend-based estimates won’t hold up under limited assurance. SustainSense auto-fetches primary source data from the world’s largest climate database in 30+ languages — eliminating the need to send supplier questionnaires that most suppliers won’t complete.
Sprih’s audit-ready data infrastructure supports both limited and reasonable assurance engagements. Reporting cycles that typically take three months can be completed in three weeks. Sprih has native alignment with California SB-253 and SB-261 timelines, alongside CSRD, GHG Protocol, and TCFD frameworks — so your team isn’t managing parallel processes for different jurisdictions.
