The California Air Resources Board (CARB) has released a preliminary list identifying over 4,000 U.S. companies potentially subject to the state’s new climate disclosure regulations, SB 253 and SB 261. This development underscores California’s commitment to enhancing corporate transparency on climate-related risks and greenhouse gas emissions.
Understanding SB 253 and SB 261
SB 253 (Climate Corporate Data Accountability Act): Targets companies with global revenues exceeding $1 billion that operate in California. These companies will be required to report Scope 1 and Scope 2 emissions starting in 2026, with Scope 3 emissions disclosures mandated from 2027.
SB 261 (Climate-Related Financial Risk Disclosure Act): Applies to companies with revenues over $500 million doing business in California. These entities must submit biennial reports detailing their climate-related financial risks and strategies for mitigation, aligning with frameworks like TCFD or IFRS S2.
Implications for Businesses
- Enhanced Risk Management: Companies will need to integrate climate risk assessments into their core business strategies, ensuring long-term resilience against regulatory, market, and physical climate risks.
- Advanced Emissions Tracking: Firms must establish robust systems to capture, calculate, and verify Scope 1, 2, and 3 emissions across their operations and value chains.
- Strategic Stakeholder Engagement: Transparent climate reporting will become a critical tool for investors, regulators, and customers, highlighting a company’s sustainability performance and risk preparedness.
- Competitive Advantage through Compliance: Early adopters can leverage enhanced reporting as a differentiator, positioning themselves as responsible, forward-thinking businesses in a market increasingly focused on ESG performance.
- Operational Alignment: Legal, finance, and sustainability teams will need to collaborate closely to ensure that reporting practices align with California’s disclosure requirements and evolving ESG standards.
How EcoActive Supports Companies with California’s Climate Disclosure Laws
Navigating California’s SB 253 and SB 261 can be complex, but EcoActive helps companies confidently meet these new reporting requirements. Here’s how we guide businesses:
- AI-Powered: Harness artificial intelligence to automate complex data collection, reporting, and risk mapping.
- Process-Driven Reporting: Follow structured, repeatable workflows that keep every disclosure audit-ready.
- Efficiency First: Reduce manual effort, cut compliance costs, and save valuable time.
- XBRL from the Start: Ensure accuracy and consistency with integrated XBRL tagging built into the workflow.
- InDesign Integration: Export reports seamlessly into InDesign for professional layouts and compliance-ready formatting.
Immediate Actions Checklist for Companies
✅ Check CARB’s preliminary list to see if your company is included or likely to be included.
✅ Evaluate reporting obligations based on revenue and California operations.
✅ Begin collecting emissions and climate risk data, even if preliminary.
✅ Leverage EcoActive’s ESG support to streamline tracking, analysis, and reporting.
✅ Monitor CARB guidance, including templates, definitions, and timelines.
✅ Engage EcoActive experts to build a robust, compliant reporting program.
By combining expert guidance with advanced ESG tools, companies can turn compliance into an opportunity, strengthen ESG performance, and build trust with stakeholders in an increasingly climate-conscious market.
📄 Access CARB’s Preliminary List of Companies: View the 4,000+ companies list
📞 Ready to understand how EcoActive can support your company with SB 253 & SB 261 compliance? Book a discovery call with our team today.
