Effortlessly meet California’s SB 253 and SB 261 regulations

Everything you need to know about compliance, deadlines, and penalties.

California’s landmark climate transparency package imposes new state-level greenhouse gas (GHG) and climate-risk reporting obligations on companies doing business in California. Deadlines begin in 2026, with penalties reaching up to $500,000 per year. Greenplaces helps you prepare, document, and report with confidence.

Table of contents

SB 253 and SB 261 overview

California’s landmark climate transparency package

Enacted in October 2023 and amended in 2024 by SB 219, California’s Climate Accountability Package — SB 253 (“Climate Corporate Data Accountability Act”) and SB 261 (“Climate-Related Financial Risk Act”) — imposes new state-level greenhouse gas (GHG) and climate-risk reporting obligations on companies doing business in California.

These laws remain under active CARB rulemaking. Deadlines for disclosures begin in 2026. Penalties may reach up to $500,000 per year for SB 253 violations and $50,000 per year for SB 261 violations.

Who’s affected

Revenue thresholds and entity type

Both laws apply to companies “doing business in California” — defined as entities with sales, property, or payroll in California, or other indicia of in-state operations. Here’s how each bill defines the scope of coverage.

SB 253
>$1B

Annual revenue threshold

Both laws apply to companies “doing business in California” — defined as entities with sales, property, or payroll in California, or other indicia of in-state operations. Here’s how each bill defines the scope of coverage.

SB 261
>$500M

Annual revenue threshold

The business must be formed under California law, another U.S. state, the District of Columbia, or under a U.S. federal statute, with total annual revenues exceeding $500 million and doing business in California.

SB 219 amendment
Parent/ subsidiary reporting

SB 219 clarifies reporting at the parent company level. Subsidiaries that meet thresholds may not file separately if the parent covers their emissions and risk. Data collection structures must ensure emissions and financial risk data from subsidiaries feed into the consolidated report.

Revenue consolidation matters: When forming your group consolidation, include affiliate revenue as required by accounting standards. If you cross $1 billion via consolidation, you may be covered under SB 253 — even if your standalone entity revenue falls below the threshold.

California climate disclosure requirements

SB 253 vs. SB 261: side-by-side obligations

Below is a side-by-side breakdown of each law’s requirements, scope, and assurance expectations.

SB 253: Climate Corporate Data Accountability Act SB 261: Climate-Related Financial Risk Disclosure
Purpose Mandatory public GHG emissions disclosure Biennial public climate financial risk reporting. Reporting is currently voluntary.
Threshold > $1 billion annual revenue + doing business in California > $500 million annual revenue + doing business in California
Emission Scopes Scopes 1, 2, and 3 N/A (focus is financial/climate risk)
First reporting year Scope 1 & 2 in 2026 (covering prior fiscal year). Companies with FY endings between Jan 1 – Feb 1 must report FY 2026 data; those ending later in 2026 must report FY 2025. Each filer will have six months after its fiscal year end to submit. Enforcement is currently paused, but the statutory SB 261 reporting deadline remains January 1, 2026.
Scope 3 phased Scope 3 and assurance both begin in 2027 and beyond. N/A
Assurance Optional for 2026 but required (limited assurance) for Scopes 1 and 2 starting 2027; Scope 3 and assurance begin in 2027. SB 261 does not require third-party verification.
Public disclosure Emissions disclosures must be published publicly (e.g. on website) and a public link submitted to CARB or made available via CARB’s digital platform Finance risk report must be published on the entity’s website and submitted (or linked) to CARB’s docket.
Timeline and deadlines

Consolidated compliance timeline

From legislative introduction through first reporting cycles and beyond — here’s the full picture of SB 253, SB 261, and SB 219 key dates.

CARB finalized implementing rules at its public hearing on February 26, 2026, setting the first major deadlines. First SB 253 Scope 1 & 2 reports are due August 10, 2026.

  • January 2023 ●
    SB 253 and SB 261 introduced in California Legislature.
  • October 2023 ●
    Governor Newsom signs SB 253 and SB 261 into law.
  • August 31, 2024 ●
    Legislature passes SB 219, amending SB 253 & SB 261 and extending CARB’s regulation deadline to July 1, 2025.
  • December 2024 ●
    CARB issues Enforcement Notice, stating that for first SB 253 reporting cycle in 2026, no penalties will be imposed for incomplete reporting if the entity demonstrates a “good faith” effort and retains emissions data.
  • January 1, 2025 ●
    Original deadline for CARB to adopt implementing regulations for SB 253 (not met).
  • July 1, 2025 ●
    Latest date by which CARB must adopt regulations under SB 219.
  • October 10, 2025 ●
    CARB posts S1 and S2 reporting draft template.
  • November 18, 2025 ●
    Ninth Circuit granted the U.S. Chamber of Commerce’s motion for an injunction pending appeal in Chamber of Commerce v. Randolf, temporarily halting enforcement of SB 261 while the court reviews the case on its merits.
  • January 1, 2026 ●
    First SB 261 climate risk reports due (covering 2025). Original deadline for SB 261 climate risk reports (covering 2025) to be published to entity websites.

  • February 26, 2026 ●
    CARB conducts public hearing and unanimously finalizes implementing rules for SB 253 and SB 261, setting the first major deadlines for 2026.

  • June 30, 2026 ●
    Scope 3 disclosure begins under SB 253 (CARB to determine schedule). Limited assurance for scope 3 may be required.
  • August 10, 2026 ●
    SB 253 Scope 1 & 2 reporting due.
  • 2027 ●
    Scope 3 disclosure and limited assurance begins under SB 253.
Penalties and enforcement

The cost of non-compliance

CARB may impose administrative penalties for failures such as non-filing, late filing, or misstatements. The first reporting cycle (2026) carries a good faith grace period — but that protection requires action now.

SB 253 — GHG Emissions
$500,000

maximum per year

  • CARB may impose penalties for non-filing, late filing, or misstatements in Scope 1 and 2

  • Penalties for Scope 3 misstatements made in good faith and disclosed are prohibited by statute

  • First cycle (2026): no penalties if entity demonstrates good faith effort and retains data

SB 261 — Climate Risk
$50,000

maximum per year

  • Penalties may apply for non-compliance, late filing, or inadequate disclosures

  • Enforcement currently paused pending Ninth Circuit appeal outcome

  • CARB may later mandate audit or assurance as regulations evolve

In the first reporting cycle (2026), CARB announced it will exercise discretion not to enforce penalties for SB 253 so long as entities demonstrate good faith efforts and retain supporting data. Enforcement beyond the first cycle will depend on CARB’s regulations, criteria of “good faith,” severity of violations, and data retention practices.

Good faith effort criteria

What CARB considers “good faith”

CARB’s December 2024 Enforcement Notice outlines five key elements of good faith compliance. Meeting these criteria is your primary protection against penalties in the first reporting cycle.

Data retention

Maintain raw emissions data, calculations, and underlying assumptions throughout the compliance cycle.

  • Retain raw emissions data and calculations
  • Retain evidence of internal control and measurement methodology
  • Preserve supporting documentation

Reasonable attempt at full reporting

Report all emissions scopes to the extent data is reasonably available.

  • Report all scopes where data is reasonably available
  • Document gaps, assumptions, and estimations transparently

Progressive improvement

Demonstrate a clear timeline toward full compliance over subsequent reporting years.

  • Show increases in data coverage year over year
  • Document incremental methodology improvements

Transparency over limitations

Openly disclose the uncertainties, estimations, and constraints your organization encountered.

  • Disclose uncertainties and estimations
  • Commit to iterative enhancements in methodology

Engagement with CARB

Active engagement with CARB’s process signals commitment and reduces enforcement risk.

  • Participate in public workshops and submit comments
  • Respond to CARB requests and monitor guidance
  • Adjust practices accordingly

The bottom line

If an entity fails to meet these criteria — or deletes or fails to retain data — CARB may consider imposing penalties in later cycles, even for the first reporting year.

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Amendments and litigation

SB 219 amendments and legal risk

SB 219, passed August 31, 2024, made several significant changes to both statutes. Parallel litigation from the U.S. Chamber of Commerce introduces additional uncertainty companies should monitor closely.

SB 219 amendments
  • Extended the CARB regulation adoption deadline from January 1, 2025, to July 1, 2025, without altering statutory reporting deadlines.
  • Removed the requirement for a fee upon filing, but preserved the authority for CARB to impose program fees.
  • Permitted consolidated (parent-level) reporting for subsidiaries under SB 253, enabling group-level roll-ups.
  • Allowed CARB the discretion to contract with a third-party emissions reporting organization (or operate internally) to manage the disclosure system.
  • Changed scope 3 timing: replaced the statutory requirement of 180 days after scopes 1 & 2 with a schedule to be determined by CARB.

  • For SB 261, permitted using equivalent disclosures from other jurisdictions if CARB approves equivalency (e.g. CDP or TCFD filings)

Litigation and risk
  • The U.S. Chamber of Commerce filed suit in January 2024 challenging the constitutionality of SB 253 and SB 261.

  • On November 18, the U.S. Court of Appeals for the Ninth Circuit issued an order temporarily enjoining enforcement of California’s SB 261 (climate-related financial risk disclosure) pending appeal.

  • Oral arguments before the Ninth Circuit are set for January 9, 2026.

  • Outcomes in the courts may affect enforceability timelines or aspects of the statutes, but current planning should assume full implementation.
  • CARB’s delay in adopting final regulations increases compliance risk for companies without early preparedness.

Planning guidance

Do not rely on litigation outcomes to delay preparation. Companies that defer readiness risk missing the good faith window in the first reporting cycle and face elevated enforcement risk in 2027 and beyond.

Frequently asked questions

Common SB 253 and SB 261 questions

Answers to the questions we hear most often from companies working through California climate disclosure compliance.

If my revenue is slightly below $1 billion, am I safe from SB 253?

No — when forming your group consolidation, include affiliate revenue as required by accounting standards. If you cross $1 billion via consolidation, you may be covered.

SB 253 refers to total annual revenues (generally global), consistent with similar reporting regimes.

Under existing statutory language, companies “doing business in California” are entities that have sales, property, or payroll in California, or other indicia of in-state operations (akin to state tax nexus tests).

Possibly — CARB’s forthcoming regulations are expected to define thresholds (e.g. minimum revenue from CA, sales factor). Monitor draft rules closely.

Yes, SB 219 allows consolidated reporting across parent and subsidiaries under SB 253, eliminating duplicate obligations.

For SB 261, yes — SB 219 permits using equivalent disclosures under other jurisdictions if CARB approves equivalency.

For SB 253, substitution is more limited; entities must align with CARB protocol and meet the state’s assurance and disclosure requirements.

Yes — for SB 253, limited assurance is mandatory starting in 2026 for scopes 1 and 2. Reasonable assurance is phased in by 2030.

SB 261 does not currently impose verification, though CARB may later mandate audit or assurance.

Under SB 253, scope 3 disclosure begins in 2027 per statute; SB 219 allows CARB to set schedule rather than strict 180-day rule.

Not for the first cycle: The statute prohibits penalties for misstatements with reasonable basis and good faith disclosure between 2027 and 2030.

Yes — SB 253 permits penalties for late filing or partial misstatement (scopes 1 & 2). SB 261 allows penalties for late or inadequate reports up to $50,000 per year.

Yes — per CARB’s December 2024 Enforcement Notice, for the first SB 253 cycle in 2026, entities demonstrating good faith effort and data retention will not be penalized for incomplete reporting.

Biennially (every two years) after the initial January 1, 2026 deadline.

Yes, you can present breakdowns (by facility, business line, geography) within the consolidated report, provided overall totals align.

No — SB 253 and SB 261 target private and public corporate entities formed under U.S. statutes or state law. They do not target government or nonprofit bodies.

You can include forward-looking disclosures (e.g. emissions reduction pathways, climate targets) in your public report, but only retrospective measured scopes are mandatory.

The statute requires description of risk types (transition, physical, litigation, regulatory), financial impacts, and mitigation measures. Details will depend on CARB’s implementing requirements.

GHG and financial risk disclosures cover global operations as relevant, but nexus and “doing business in California” will determine coverage.

You should issue corrected disclosures publicly, document the correction rationale, and provide explanations in subsequent reports. Repeat or intentional misstatement increases enforcement risk.

The statute does not prescribe scenario models, but CARB regulations are expected to require scenario disclosure consistent with market practice and ESG standards.

You must report what you have, document gaps and assumptions, and incrementally improve coverage over time under “good faith” criteria.

Use dual reporting processes, maintain mapping between frameworks, and consider CARB’s equivalency rules (for SB 261) or future substitution allowances.
Tools to help your journey

Resources built for SB 253 and SB 261 compliance

Deep-dive into each regulation or browse our full library — everything you need to assess your obligations, track deadlines, and stay current.