September 2, 2025: The California Air Resources Board (CARB) released a draft checklist to support companies in preparing their first climate-related financial risk reports under SB 261, also known as the Climate-Related Financial Risk Disclosure Program. These reports are due January 1, 2026, and must then be submitted biennially thereafter.
(ww2.arb.ca.gov)
What’s New?
- Draft Checklist Now Available: CARB’s checklist outlines the minimum content and structure required for SB 261 compliance.
- Public Docket Opens December 1, 2025: Covered entities must post the public link to their SB 261 report in CARB’s docket, which remains open through July 1, 2026.
- Subsidiary Reporting Clarified: Subsidiaries don’t need to issue separate reports if the parent’s consolidated report covers them.
- Framework Flexibility: Companies may align with TCFD (2017), IFRS S2, or another recognized regulatory or exchange-based framework.
- Fiscal Year Data Permitted: SB 261 does not mandate calendar-year data; companies may use their most recent and reliable data, including fiscal year reporting.
- Insurance Exemption: Entities regulated by the California Department of Insurance—or operating as insurers in any state—are exempt from this requirement.
- Scope 1, 2, and 3 Emissions: Disclosure of Scope 1–3 emissions is not required in the first reporting year, but it will become relevant for future reporting cycles.
Why It Matters
- Advance Guidance Provided: CARB’s checklist helps organizations plan before their first SB 261 submission, reducing compliance uncertainty.
- Boosts Transparency: The December public docket ensures climate risk reports are publicly accessible in one central location.
- Simplifies Multi-Entity Reporting: Consolidated reporting at the parent level reduces duplication and eases reporting burdens.
- Promotes Global Alignment: Accepting established frameworks encourages comparability with international standards.
- Practical Data Guidance: Allowing fiscal-year data offers companies flexibility and eases disclosure efforts.
- Targeted Exclusions: The insurance industry is excluded, focusing the program on intended sectors.
How EcoActive ESG Can Support
At EcoActive ESG, we support organizations in adapting to evolving regulatory expectations. Our platform offers tools to:
- Build future readiness by organizing emissions data across Scope 1, 2, and 3 for upcoming reporting cycles
- Prepare disclosure-ready documentation
- Track regulatory timelines and streamline reporting
We help businesses align with global and regional reporting mandates, giving you the tools to act early and stay compliant.
Source & Full Details:
Read the full CARB draft checklist here:
🔗 CARB – Climate-Related Financial Risk Disclosures: Draft Checklist (September 2025)
