Table of contents

On August 21, the California Air Resources Board (CARB) held a three-hour workshop to review staff concepts and next steps for SB 253, SB 261, and SB 219. Here’s a summary of what CARB clarified, what’s proposed, what remains open, and what companies should do now.

Key timeline checkpoints (proposed or confirmed)

  • Public comment (staff concepts): August 21–September 11, 2025

  • Notice of Proposed Rulemaking (fee regulation): October 14, 2025

  • 45-day APA comment period: October 17–November 30, 2025

  • CARB Board hearing (fee rulemaking): December 11–12, 2025

  • SB 261 climate-risk report posting (statutory): By January 1, 2026

    • Report must be posted on company website

    • Public docket opens December 1, 2025 and closes July 1, 2026

  • Draft S1/S2 reporting templates: By end of September 2025 (for public feedback)

  • SB 253 Scope 1 and 2 reporting (staff proposal): June 30, 2026

  • SB 253 Scope 3 reporting: Begins in 2027 (deadline to be set by CARB)

Who is covered (current direction)

  • Doing business in California: CARB continues to rely on Revenue & Tax Code §23101 (subsections a and b) and is exploring use of Secretary of State listings. Companies are responsible for compliance even if not listed.

  • Revenue threshold: Staff is shifting away from “gross receipts” toward a plain-English “total global revenue” concept (no deductions), consistent with providers like D&B and S&P. This remains open for input.

  • Parent/subsidiary treatment: Staff proposes >50% voting control as the threshold and parent-level consolidation (per SB 219). A self-reporting process may be added to prevent duplicative filings.

  • Proposed exemptions (open for comment): nonprofits, entities with only teleworking employees in California, government entities, CAISO, and entities whose only California activity is wholesale electricity in interstate commerce.

Reporting requirements and assurance

SB 261 (climate-related financial risk):

  • Aligned with TCFD and ISSB S2. Reports must specify the framework used, what’s included vs. excluded, and plans to address gaps.

  • Organizing pillars remain governance, strategy, risk management, and metrics/targets.

  • Quantitative scenario modeling will not be required in year one.

  • Scope 1 and 2 emissions reporting will not be required under SB 261 in year one, to avoid duplication with SB 253.

SB 253 (GHG emissions):

  • Scope 1 and 2 due June 30, 2026 (proposed).

  • Scope 3 reporting begins in 2027 (exact due date pending).

  • Draft templates expected by September 2025.

Assurance:

  • Limited assurance is the proposed starting point.

  • CARB referenced possible standards including ISSA 5000, AA1000, ISO 14060 family, and AICPA.

  • Independence and the potential for CARB audits/oversight were emphasized.

Proposed fees (staff concept)

  • Flat annual fees per program (not per ton), covering ~$13.9M in administrative costs, with inflation adjustments.

  • Estimated annual fees (illustrative):

    • $3,106 for SB 253 entities

    • $1,403 for SB 261 entities

  • Entities with revenue over $1B would pay both.

  • Parent companies may pay fees on behalf of subsidiaries.

  • Final fee levels will be refined during rulemaking.

What’s still to be finalized

  • Final revenue definition and approach to “doing business” lists

  • Exact Scope 3 deadline (statutory start is 2027; due date TBD)

  • Assurance framework details (level, standards, verifier oversight)

  • Final fee levels after rulemaking record

What companies should do now

For SB 261: Lock in your January 1, 2026 website publication plan; align to ISSB S2/ TCFD structure; prepare to submit your public link to CARB starting December 1, 2025 and before the docket closes July 1, 2026.

For SB 253: Stand up Scope 1 and 2 data systems and controls now to comfortably meet the proposed June 30, 2026 deadline; review forthcoming CARB templates (by end of September 2025) as soon as they’re posted.

Scope 3 readiness: Map categories, data owners, and estimation methods; build toward a 2027 first submission.

Governance & assurance: Establish or fortify your climate governance, document controls, and segregation of duties in anticipation of limited assurance and potential CARB audits; Begin interviewing assurance providers comfortable with accepted emissions verification standards (ISSA 5000/ AA1000 / ISO 14060 family / AICPA)

Budgeting: Plan for annually recurring flat fees (both programs if >$1B revenue).

 

While CARB’s rulemaking is ongoing, the direction is clear. Companies that begin preparing governance, data systems, and assurance readiness now will be best positioned to meet deadlines and minimize compliance risk.

 

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