SB 253 and SB 261 don’t reinvent the wheel—they align with existing global frameworks. SB 253 uses the Greenhouse Gas Protocol. SB 261 builds on the TCFD. This alignment signals something bigger: climate reporting is now maturing into a globally consistent, auditable, and comparable discipline. The upshot? If you’re already working toward CSRD, TCFD, or SBTi targets, you’re on the right path. But now, you need to turn guidance into governance.

Why Alignment with Global Frameworks Matters

Here’s the thing: California’s laws could’ve created a compliance headache by inventing brand-new frameworks. They didn’t.

Instead, they locked into the two most widely adopted climate reporting standards:

• SB 253 mandates Scope 1, 2, and 3 emissions disclosures based on the Greenhouse Gas Protocol.
  
• SB 261 requires climate-related risk disclosures aligned with TCFD (Task Force on Climate-Related Financial Disclosures).
  

This isn’t just convenient. It’s strategic.
By anchoring themselves in existing global frameworks, California’s laws:

• Reduce friction for multinationals already preparing for CSRD, SBTi, or ISSB
  
• Increase comparability across jurisdictions
  
• Move climate disclosures closer to the rigor of financial reporting
  

Let’s break them down.

SB 253: Built on the Greenhouse Gas Protocol

What the Law Says

SB 253 requires large companies doing business in California to disclose their:

• Scope 1 emissions (direct)
  
• Scope 2 emissions (indirect, from electricity use)
  
• Scope 3 emissions (all other indirect emissions across the value chain)
  

These disclosures must follow the GHG Protocol—the most widely used accounting standard for greenhouse gas emissions globally.

Why the GHG Protocol?

It provides:

• A clear methodology for emissions calculation
  
• Sector-specific guidance
  
• A foundation used by SBTi, CDP, and many national frameworks
  

In short, if you’ve already started a GHG inventory, you’re halfway there.

What You’ll Need

• Activity data across operations, suppliers, logistics, and purchased goods
  
• Clear boundaries (organizational and operational)
  
• Emission factors that are region- and activity-specific
  
• A transparent audit trail, especially as limited assurance kicks in (2026)
  

SB 261: Anchored in the TCFD Recommendations

What the Law Says

SB 261 mandates that companies disclose their climate-related financial risks in line with the TCFD framework. This includes:

1. Governance: How your board and leadership oversee climate risks
   
2. Strategy: How climate scenarios affect your business
   
3. Risk Management: How you identify, assess, and manage those risks
   
4. Metrics and Targets: What you use to track and act on them
   

Why TCFD?

It’s widely endorsed by:

• The G7 and G20
  
• The International Financial Reporting Standards (IFRS) Foundation
  
• Major regulators including the SEC, UK FCA, and Japan FSA
  

TCFD turns climate disclosures from a CSR initiative into a financial risk management exercise. That’s a major mindset shift for companies.

What You’ll Need

• Board-level oversight documentation
  
• Climate scenario analysis and stress testing
  
• Enterprise risk management (ERM) linkage
  
• Financial impacts, exposure, and adaptation strategies
  

How These Frameworks Complement Each Other

The GHG Protocol (SB 253) and TCFD (SB 261) aren’t siloed. They’re interlinked:

Together, they give regulators, investors, and stakeholders a full picture:

• What are your emissions?
  
• What do those emissions mean for your business resilience?
  

What Businesses Must Now Operationalize

This alignment demands more than a comms strategy. It requires operational capacity:

1. Cross-functional Coordination

You can’t do this from the ESG team alone. You’ll need:

• Finance (for scenario planning and materiality analysis)
  
• Operations (for emissions data)
  
• Procurement (for Scope 3)
  
• Risk & compliance (for TCFD governance and controls)
  

2. Platform Infrastructure

Spreadsheets won’t cut it. You’ll need systems that can:

• Automate GHG Protocol-based emissions tracking
  
• Tag emissions to financial data
  
• Generate investor-grade, audit-ready reports
  
• Keep up with multiple frameworks across markets
  

3. Assurance Readiness

By 2026, SB 253 requires limited assurance for emissions data.
You’ll need to:

• Establish version control and change logs
  
• Maintain documentation of assumptions and boundaries
  
• Prove the provenance of your Scope 3 estimates
  

How This Affects Dual and Global Reporting

If You’re Reporting Under CSRD

• CSRD aligns with EFRAG/ESRS, which incorporate GHG Protocol and TCFD
  
• Reporting under SB 253 and 261 gives you a strong CSRD head start
  
• You may still need to tweak for double materiality and digital tagging
  

If You’re Using Voluntary Standards (CDP, SBTi, ISSB)

• You’re on the right track—but voluntary is now becoming mandatory
  
• Standardize documentation, verification processes, and timelines
  
• Upgrade internal controls and stakeholder alignment