REGULATORY REPORTING

California Climate Laws: SB 253
& SB 261 Compliance Support

Navigate California’s Climate Laws with Confidence—Expert Support for SB 253 and SB 261 reporting.

Regulatory Update — February 26, 2026

CARB formally approved the Initial Regulation for SB 253 (Climate Corporate Data Accountability Act) and SB 261 (Climate-Related Financial Risk Act) on February 26, 2026.

Key developments:

SB 253 first-year deadline confirmed: August 10, 2026 (Scope 1 & 2 emissions only; Scope 3 due 2027; Limited Assurance for Scope 1 & 2 starts in 2027)
SB 261 compliance is currently voluntary: The Ninth Circuit Court of Appeals has issued a preliminary injunction pausing enforcement while litigation proceeds.
Good-faith enforcement: CARB has stated it will apply enforcement discretion for good-faith first-year SB 253 Scope 1 & 2 submissions.

Source: CARB Press Release

What You Need to Know

California has enacted two landmark climate laws that require companies with global revenues over $500M who “do business” in the state to disclose their climate-related risks and greenhouse gas (GHG) emissions.

In addition to the global revenue thresholds, CARB has indicated the following may qualify a company as “doing business” in California, however this is subject to change as the definition is finalized:

California sales greater than $735,019 (including sales through agents or contractors)
California payroll over $73,500
California property over $73,500
Legally incorporated or headquartered in California

For latest details on companies in scope and tax codes, see CARB’s Proposed Resolution 26-1 (Feb 2026) Note: Revenue thresholds align with California Franchise Tax Board gross receipts filings per CARB’s February 2026 confirmation (Rev. & Tax Code §23101(a)).

Please continue checking CARB’s SB 253 page for further updates.

Key Points

Companies between $500M and $1B must comply with SB 261 only.
Companies at or over $1B are required to comply with both SB 261 and SB 253.
Penalties of up to $50,000/year for SB 261 and $500,000/year for SB 253 apply when enforcement is active. CARB has confirmed it will use enforcement discretion for good-faith first-year SB 253 submissions. Note: SB 261 enforcement is currently paused by a Ninth Circuit court injunction.

Key Reporting Deadlines

SB 261 Climate Risk Disclosure – enforcement currently paused by court order. Compliance is voluntary while the Ninth Circuit hears the case. Over 120 companies have voluntarily submitted reports to CARB's public docket.
SB 253 GHG Emissions Disclosure – for 2025 data (Scope 1 & 2 only), confirmed deadline: August 10, 2026. Scope 3 emissions reporting and Scope 1 & 2 Limited Assurance begins in 2027.

How we help companies comply with the California Climate laws
At Blue Sky Climate Reporting Services, Inc., we provide two pathways — Full Service and Guided Support — for compliance with each climate law (or both). This way, companies can choose the level of support that matches their needs and internal resources.

SB 261 – Climate-Related Financial Risk Disclosure

Important Legal Update: As of February 2026, the Ninth Circuit Court of Appeals has issued a preliminary injunction pausing CARB’s enforcement of SB 261 while litigation brought by the U.S. Chamber of Commerce proceeds. Compliance with SB 261 is currently voluntary. Companies that wish to demonstrate early commitment to climate risk transparency may still submit reports to CARB’s public docket — over 120 organizations have already done so. Blue Sky Climate continues to monitor this litigation closely and will update clients as the case develops.

Applies to companies with $500M+ in annual revenue
Covers 2024 data; first reports due January 1, 2026

Pathway 1: Full Service Compliance

Governance mapping, board and management oversight review
Risk & opportunity interviews across business units
Climate scenario analysis and financial impact assessment
Drafting a complete SB 261 disclosure aligned with IFRS S2 and TCFD
Assurance readiness support for any quantified data under ISO 14064-3

Best for: Companies seeking a turnkey solution where we manage the entire reporting process.

Pathway 2: Guided Support Program

Templates and toolkits for governance mapping, risk registers, and scenario analysis
Step-by-step guidance for disclosure preparation
1:1 coaching sessions with climate disclosure experts
Review and feedback on draft SB 261 reports

Best for: Companies that want to lead the process internally but value expert guidance, structure, and review.

SB 253 – Climate Corporate Data Accountability (GHG Emissions)

Applies to companies with $1B+ in annual revenue
Covers 2025 data; Scope 1 & 2 emissions due August 10, 2026. Scope 3 emissions reporting begins in 2027.Scope 1 and 2 Limited Assurance will be required starting in 2027.

Pathway 1: Full Service Compliance

Best for: Companies requiring end-to-end project management and technical expertise for emissions reporting.

Comprehensive data collection and GHG accounting (Scopes 1, 2, and 3)
Internal readiness review of data systems and controls
Development of metrics and targets aligned with SB 253 and GHG Protocol
Drafting full disclosure aligned with IFRS S2 and CARB guidance
Pre-assurance support and coordination with independent verifiers under ISO 14064-3

Pathway 2: Guided Support Program

Best for: Companies that have internal data teams but need tools and expert oversight to ensure accuracy and compliance.

Templates, trackers, and methodologies for Scopes 1–3 calculations
Step-by-step guidance on data collection and emissions estimation
1:1 coaching sessions to resolve technical questions
Pre-submission review of GHG disclosure and emissions data

Independent Assurance Services

Best for: Companies seeking a trusted, independent verifier to confirm the accuracy and credibility of their climate disclosures.

For companies that have already prepared their SB 253 or SB 261 disclosures, Blue Sky Climate also offers independent third-party assurance to meet California’s requirements for external verification.

Important note: To maintain independence and objectivity, we cannot provide assurance for climate reports we directly prepare. However, for companies who manage their disclosures internally, or with another advisor, we can serve as your external assurance provider.

Our GHG emissions Limited Assurance offering Includes:

Limited assurance engagements in line with ISO 14064-3, ISAE 3000 (soon to be ISSA 5000), AA1000AS and other global standards
Verification of Scope 1, 2, and 3 GHG emissions (SB 253)
Verification of climate-related risk and mitigation disclosures (SB 261)
Independent GHG emissions verification.

Why Work With Blue Sky Climate?

Specialized expertise in California’s climate laws, IFRS S2, TCFD, SASB, and the GHG Protocol
A cost-effective alternative to large consulting firms
Structured roadmaps designed for $500M–$1B+ revenue companies
Guidance that balances technical rigor with practical application
Support that builds both compliance readiness and long-term capability.