In November 2025, when we last reported on the state of climate disclosures in California, there was still some hesitation among companies whether to proceed or wait, amid ongoing litigation and regulatory uncertainty. Since then, the California Air Resources Board (CARB) has provided clarity on several points, including definitions and timelines, meaning the “wait” option is no longer feasible for companies in scope. While some legal uncertainty remains around climate‑related financial risk reporting, the emissions disclosure regime under SB 253 is firmly moving forward.
Below is an overview of key updates since late last year, followed by what they mean for companies today and recommended actions.
What has changed since November 2025?
SB 253 Is Moving Forward — With Approved Regulations and a Firm Deadline
In February 2026, CARB approved its Initial Regulation implementing SB 253 (the Climate Corporate Data Accountability Act). This regulation establishes the administrative framework for the program, including foundational definitions, a fee structure, and — most importantly — a firm initial reporting deadline of August 10, 2026 for Scope 1 and Scope 2 emissions.
CARB reiterated these points during its March 23, 2026 public workshop,[1] which focused on implementation details for 2026 reporting and forward‑looking rulemaking for 2027–2030.
Key takeaway: As of late last year, many organizations were uncertain whether SB 253 would be delayed or enjoined alongside SB 261. That has not happened. SB 253 was not enjoined, and CARB is actively implementing it.
Applicability is now more clearly defined
Prior to February 2026, CARB had indicated it was leaning on existing tax definitions of “doing business in California,” but noted those definitions could evolve. In the February regulation, CARB finalized its approach by formally adopting statutory cross‑references:
- “Doing business in California” is defined by reference to California Revenue & Taxation Code §23101
- “Revenue” is defined as gross receipts under §25120(f)(2) of the Code.
Key Takeaway: These definitions now have regulatory force for determining whether a company is subject to SB 253. Although CARB has published a list of potentially covered companies, it continues to emphasize that the list is not legally determinative — each entity must independently assess its applicability.
Enforcement discretion has been clarified for the first reporting cycle
CARB’s December 5, 2024 Enforcement Notice remains a key source of transitional relief. CARB has stated it will not take enforcement action for incomplete Scope 1 and Scope 2 reporting in the first 2026 cycle, provided companies can demonstrate good‑faith compliance efforts. Entities that were not collecting data or were not planning to collect data at the time the Enforcement Notice was issued (December 5, 2024), are not expected to submit Scope 1 and 2 reporting data in 2026. Such entities can submit a statement on company letterhead to CARB stating that they did not submit a report and indicating that in accordance with the Enforcement Notice, the company was not collecting data or planning to collect data at the time the Notice was issued.
At its March 2026 workshop, CARB further explained that companies not collecting emissions data as of December 2024 may rely on existing data and submit explanations or attestations describing gaps, rather than fully built inventories.
Key Takeaway: This is enforcement discretion, not an exemption. Companies must still engage, document and submit information.
Scope 3 reporting is still coming, and CARB has outlined how
In our previous update, Scope 3 reporting was acknowledged as a future requirement with little detail. At the March 2026 workshop, CARB presented three potential approaches for phasing in Scope 3 emissions reporting starting in 2027:
- Broad applicability: All reporting entities disclose all material Scope 3 categories (15 total categories with the ability to exclude categories considered de minimis with appropriate explanation).
- Sector‑based phase‑in: Certain sectors report first (e.g., transportation, technology, energy, manufacturing and distribution).
- Category‑based phase‑in: All entities begin with the most common Scope 3 categories (e.g., Categories 1, 3, 5, 6, and 7).
CARB also confirmed that assurance requirements for Scope 3 will be addressed in later rulemaking, beyond the 2026 reporting cycle.
Key Takeaway: Consider submitting a comment to CARB on the proposed approaches. Informal comments will be received until June 1, 2026.
SB 261 remains on hold — But continue to plan and monitor
Legal challenges continue to affect SB 261 (the Climate‑Related Financial Risk Act). In November 2025, the Ninth Circuit enjoined enforcement of SB 261 pending appeal, and that injunction remains in place following oral argument on January 9, 2026.
As of now:
- CARB is not enforcing SB 261.
- The statutory January 1, 2026 reporting deadline is effectively paused.
- CARB has finalized administrative regulations so the program can move quickly once litigation is resolved.
- Over 130 companies have uploaded their report to the public docket.[2]
Key Takeaway: The injunction has lasted longer than initially expected, but CARB has made clear it is preparing for eventual implementation rather than abandoning the program.
Recommended actions for companies now
Given these developments, companies should recalibrate their approach:
- Confirm applicability promptly. Apply the finalized definitions of “doing business” and revenue thresholds. Do not rely solely on CARB’s published entity lists, they are just examples.
- Prepare for August 10, 2026 (SB 253). If your company meets the thresholds and was collecting or reporting this information prior to December 5, 2024, it is expected to comply.
- Establish or refine Scope 1 and 2 inventories aligned with the GHG Protocol.
- Document assumptions, methodologies and data gaps to demonstrate good‑faith efforts.
- Use 2026 as a mobilization year where needed. If emissions data collection did not begin before December 2024, prepare explanatory submissions and build systems for future cycles.
- Begin Scope 3 prioritization now. Map value‑chain categories and identify likely material areas based on CARB’s three phase‑in scenarios.
- Monitor SB 261 litigation but do not put climate-related financial risk work on hold. Continue internal climate‑risk work so your organization can move quickly if the injunction is lifted.
Bottom line
With the February 2026 regulation approval and subsequent March 2026 workshop, California’s emissions disclosure regime has shifted from uncertainty to execution. With SB 253 firmly on track, companies should treat 2026 as their first reporting year (August 10 deadline) or as a transition year if they did not begin collecting emissions data as of December 5, 2024. In either case, this should be the year for building the systems that support future reporting cycles.
How Protiviti can help
Protiviti helps companies conduct climate risk assessments in accordance with recognized frameworks, develop GHG emissions inventory management plans, set up systems for data collection and integration, conduct benchmarking, assist with science-based target setting and develop emissions reduction plans. We also provide assurance readiness, support preparing and reporting data to regulators and other stakeholders, and can facilitate training and capacity building for sustainable management of reporting requirements over the long term. See an example of our work here.
To learn more about our full range of sustainability services, visit our website or contact the authors.
[1] California Air Resources Board, Meetings and Workshops, https://ww2.arb.ca.gov/our-work/programs/corporate-ghg-reporting/climate-disclosure-meetings-and-workshops
[2] Climate-Related Financial Risk Reports (SB 261) Docket
