As 2026 is quickly approaching, this is a reminder to all U.S.-based companies conducting business in California to complete an analysis under both the Senate Bill 253, the Climate Corporate Data Accountability Act (“SB 253”) and Senate Bill 261, the Climate-Related Financial Risk Act (“SB 261”) to determine what disclosure obligations the company may be subject to. We’ve compiled quick reference guides for SB 253 and SB 261 below based on the currently available information about complying with these laws.
| SB 253 (Climate Corporate Data Accountability Act) | |
| Who needs to provide disclosure? | U.S. business entities with annual revenue over $1 billion that do business in California. |
| What does “doing business” mean? |
If a company meets any of the following criteria, it is considered to be a business operating in California and subject to this law:
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| When is disclosure required? |
Disclosure is required on Scope 1 and Scope 2 greenhouse gas (“GHG”) emissions during 2026 on results from 2025. No specific disclosure deadline date in 2026 has been announced. In 2027, the company will also need to include disclosure on Scope 3 GHG emissions based on results from 2026. |
| Where does disclosure need to be presented? | The company will need to provide the relevant disclosure on its website. |
| How often is updated disclosure required? | Annually. |
| What must be included in the required report? |
The company will need to disclose its GHG emissions for the below categories. For the first report to be filed in 2026 the company need only disclose Scope 1 and 2. Scope 1: GHG Emissions that result directly from the company’s activities and produced from sources owned or controlled by the company. Scope 2: GHG Emissions released indirectly that result from energy purchased and consumed by the company. Scope 3: All indirect GHG emissions that occur in the company’s supply chain, but are not directly owned or controlled by the company. The disclosure also requires independent third-party assurance over the GHG emissions reporting, starting with limited assurance (a review) in 2026 and moving to a reasonable assurance (an audit) for 2027 and beyond. |
| SB 261 (Climate-Related Financial Risks Disclosure) | |
| Who needs to provide disclosure? | U.S. business entities with annual revenue over $500 million that do business in California. |
| What does “doing business” mean? |
If a company meets any of the following criteria, it is considered to be a business operating in California and subject to these laws:
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| When is disclosure required? | On or before January 1, 2026. |
| Where does disclosure need to be presented? | The company will need to provide the relevant disclosure on its website. |
| How often is updated disclosure required? | The company will need to prepare the required report every two years. |
| What must be included in the required report? |
The Task Force on Climate-Related Financial Disclosure has provided a framework which includes 11 areas of disclosure divided among 4 categories. These areas of disclosure include the following: Governance
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Implementation of the reporting requirements has been slowed by legal challenges, so California may have additional updates about complying with the laws before the end of 2025. You can find more information on SB 253 and SB 261 in our LEGALcurrent “California Climate Disclosure Laws Have Not Evaporated After SEC Climate-Related Rule Adoption.” If you have any questions about the new rules, please contact a member of Harter Secrest & Emery’s Securities and Capital Markets group.