Client Alert: CARB Approves Climate Disclosure Regulation
/CARB Finalizes Implementation Framework for SB 253 and SB 261 Climate Disclosure Laws
On February 26, 2026, the California Air Resources Board (CARB) unanimously approved the initial implementing regulation for California’s Corporate Greenhouse Gas Reporting (SB 253) and Climate-Related Financial Risk Disclosure (SB 261) laws. While the vote did not introduce new policy shifts, it formally adopts the regulatory framework and confirms several key implementation details for covered entities.
Key Takeaways:
SB 253 - CARB confirmed that Scope 1 and Scope 2 emissions reporting is due by August 10, 2026. That deadline is now firm. CARB signaled that 2026 will function as a “good faith” implementation year, indicating enforcement discretion as companies stand up internal reporting systems. For entities with non-calendar fiscal years, reporting flexibility allows approximately 6 to 18 months from the fiscal year close to submit disclosures. The regulation also clarifies key applicability concepts, including revenue thresholds and organizational structure considerations such as parent and subsidiary treatment. Companies should carefully assess whether they meet the “doing business in California” standard, as applicability does not depend solely on physical presence. CARB also confirmed that the program will operate under a cost-recovery model, meaning annual flat fees will be set to cover CARB’s administrative and implementation costs and may be adjusted over time.
SB 261 - CARB confirmed that SB 261 enforcement remains paused due to a federal injunction pending appeal. While CARB is moving forward with finalizing the regulatory framework, it will not enforce SB 261 reporting requirements while the injunction remains in place. No new SB 261 reporting deadline was established.
Still Under Discussion
Insurance industry exemption - CARB acknowledged an exemption intended to avoid duplicative reporting with the National Association of Insurance Commissioners (NAIC) Climate Risk Disclosure Survey. This exemption may be revisited if reporting gaps or inconsistencies are identified.
Future rulemaking - Additional phases are expected to address Scope 3 emissions reporting and third-party assurance requirements, including timing. Companies should anticipate further guidance in these areas.
What This Means for Companies
CARB’s action makes clear that SB 253 is moving forward and that the August 10, 2026, reporting deadline is firm. Companies subject to SB 253 should confirm whether the law applies to them and begin preparing their emissions data, internal processes, and reporting systems now.
In contrast, SB 261 remains voluntary, but companies should remain ready while monitoring the court's ruling.
KERAMIDA will continue monitoring regulatory updates and is available to support companies at any stage of preparedness, including those seeking strategic guidance, data management, and disclosure support related to SB 253 and SB 261.
For additional references for the Board meeting visit.
