CA Climate Disclosures Clarified: CARB's New FAQ for Transparent Guidance
The California Air Resources Board (CARB) has released a FAQ document to provide clarity on the reporting requirements for two landmark climate disclosure laws: the Climate Corporate Data Accountability Act (SB 253) and the Climate-Related Financial Risk Disclosure Act (SB 261).
In the document, CARB solicits stakeholder feedback on key requirements such as applicability, exemptions, and definitions for "doing business" and "revenue" under both SB 253 and SB 261. The guidance aims to help entities comply with Health & Safety Code § 38532 and 38533, which respectively house the aforementioned acts.
Under SB 253, large companies (over $1 billion in annual revenue) doing business in California are required to disclose greenhouse gas (GHG) emissions, including Scope 1, 2, and 3 emissions in accordance with the GHG Protocol. Scope 3 emissions must be disclosed starting with the 2026 emissions, reported in 2027.
SB 261, on the other hand, requires companies with revenues over $500 million to submit biennial reports identifying and addressing material climate-related financial risks.
Reporting deadlines will hold, and prescriptive rules will be published by year-end. Companies must begin reporting 2025 Scope 1 and Scope 2 emissions in 2026 (exact deadline date to be announced by CARB). Scope 3 emissions for 2026 must be reported starting in 2027. Biennial climate-related financial risk reports per SB 261 begin in 2026 for companies above the threshold. CARB has clarified no penalties will be imposed in 2026 for SB 253 as long as companies demonstrate a "good faith effort" toward compliance.
GHG emissions must be calculated and reported in accordance with the Greenhouse Gas Protocol (GHG Protocol), the most widely accepted global standard for corporate emissions accounting. Companies are required to submit emissions data possibly to a digital reporting platform overseen by CARB. Independent third-party verification or auditor validation of reported emissions is required to ensure accuracy and credibility.
The public docket for SB 261 reports will be available on CARB's website starting December 1, 2025, and will remain open until July 1, 2026. CARB is continuing to solicit feedback on definitions for "doing business" and "revenue" under both SB 253 and SB 261, as well as allowable exemptions.
CARB's guidance for the climate disclosure laws is designed as a pragmatic, flexible, and non-punitive approach. Alyssa Zucker, Senior Industry Principal at Workiva, is guiding the company's strategy for customer-facing climate and sustainability content, and she brings 15 years of corporate sustainability experience, an MPA in Environmental Science and Policy from Columbia University, and a BA in Environmental Studies from Washington University in St. Louis.
The FAQ document provides vital information for thousands of companies preparing for inaugural disclosures and aligns reporting for SB 261 with TCFD guidelines or IFRS S2 guidelines. The approach is intended to allow businesses to establish the necessary programs and infrastructure to meet the intent of the laws.
This synopsis reflects CARB’s July 2025 FAQ clarifications meant to guide businesses through compliance with these landmark laws. The exact reporting deadlines for SB 253 are still unknown, but SB 261 reports are due on January 1, 2026.
[1]: Link to the CARB FAQ document [2]: Link to the CARB SB 253 and SB 261 webpage [3]: Link to the CARB SB 261 public workshop recording
- The California Air Resources Board (CARB) has released a FAQ document to aid in understanding the reporting requirements for the Climate Corporate Data Accountability Act (SB 253) and the Climate-Related Financial Risk Disclosure Act (SB 261), which focus on corporate sustainability, climate-change, and environmental-science.
- Under SB 261, companies with revenues over $500 million are mandated to submit climate-related financial risk reports, addressing material risks and, in accordance with SB 253, large companies (over $1 billion in annual revenue) must disclose greenhouse gas emissions following the Greenhouse Gas Protocol, a global standard for corporate emissions accounting.
- To ensure compliance and accuracy, companies are required to submit emissions data to a digital reporting platform overseen by CARB, and independent third-party verification or auditor validation is essential. The public docket for SB 261 reports will be available on CARB's website from December 1, 2025, through July 1, 2026, with SB 261 reports due on January 1, 2026.
