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.
| 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 |
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.
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.
SB 261 focuses on climate-related financial risks. Companies must disclose:
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.
| 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.
| Requirement | SB 253 | SB 261 |
| Standard | Greenhouse Gas Protocol | TCFD or IFRS S2 |
| Format | Numeric emissions inventory | Narrative risk assessment |
| Delivery | Submit to emissions platform | Publish on company’s website |
| Scope | Operations + value chain (Scope 1–3) | Financial and operational risk exposure |
SB 253 measures quantitative emissions.
SB 261 describes qualitative risks and strategic responses.
Both matter, and both require different teams (ESG, legal, finance, operations) to coordinate internally.
| Penalty Type | SB 253 | SB 261 |
| Maximum Annual Fine | $500,000 | $50,000 |
| Trigger Events | Non-filing, late filing, misstatements | Failure to publish, insufficient report |
| Safe Harbor | Good-faith Scope 3 estimates protected (until 2030) | Gaps allowed if explained with roadmap |
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.
Yes, but they serve complementary purposes.
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.
Sprih helps companies:
