CARB hosted a third public workshop on November 18th, 2025, to provide updates on California’s climate disclosure laws, SB 253 and SB 261, as amended by SB 219. For more information on these laws, read our deep dive into California’s Climate Disclosure Laws. Here are our main takeaways from the three-hour workshop.

General Updates on SB 261 and SB 253

CARB clarified the definitions for revenue and “doing business in California” during the workshop:

CARB is proposing to use Revenue and Tax Code § 25120(f)(2) to define “revenue” according to gross receipts verifiable on FTB tax filings.

For both SB 261 and SB 253, an entity’s compliance obligation will now be determined based on the lesser of its revenue from the two prior fiscal years. This is a change from the initial legislation, which only considered the revenue from the immediately preceding fiscal year for applicability.

CARB is proposing to use Revenue and Tax Code § 23101 to define “doing business in California”, with a focus on sales and omitting property holdings and payroll considerations.

Parents and subsidiary companies must each independently assess their compliance obligation based on the criteria outlined. Parent companies can submit on behalf of subsidiaries regardless of their own compliance obligation.

There are three new proposed exemptions for SB 253 and SB 261:

• Non-profit or charitable organizations, defined as tax-exempt under the Internal Revenue Code.
• Companies whose only California business is teleworking employees.
• Insurance companies are already exempt from SB 261. CARB is proposing the same exemption for SB 253 GHG reporting.

SB 261 – An Updated Timeline

SB 261’s deadline of January 1, 2026, remains unchanged. However, there is a clarified submission process:

• Climate-related financial risk reports must be posted on the complying company’s website by January 1, 2026.
• The CARB docket opens on December 1, 2025. Starting on that day, companies can post the URL linking to their report.
• The link to the report must be submitted to the CARB docket by July 1, 2026.

SB 261’s next reporting period will be 2028. This means that any companies that cross the revenue threshold in FY2025 or FY2026, but did not in FY2024, will make their first disclosure in 2028.

SB 253 – New Deadlines and New Answers

SB 253’s new proposed reporting deadline is August 10, 2026.

CARB wants all companies to have at least 6 months after their fiscal year-end to submit their reports. Therefore, they provided different requirements depending on the company’s fiscal year. If a company’s fiscal year ends between January 1 and February 1, 2026, the company will report data from the fiscal year ending in 2026. If a company’s fiscal year ends between February 2 and December 31, 2026, the company will report data from the fiscal year ending in 2025.

SB 253 requires companies to report company-wide GHG emissions, not just in California. Companies are not allowed to limit their reporting to emissions occurring within California’s geographic boundary. 

Limited assurance of Scope 1 and 2 emissions will not be required in the first 2026 reporting year. CARB will provide clarity on assurance requirements for future reporting years following a Q1 2026 CARB Board Hearing via a rule-making process. The subsequent rulemaking process will clarify reporting templates, potential accreditation standards for assurance, reporting deadlines beyond 2026, and more under SB 253.

2026 reporting requirements for SB 253 are flexible in the following ways:

• The draft Scope 1 and 2 template is optional, not required. The template can be downloaded from CARB’s resources page.
• Pre-existing GHG reports covering Scopes 1 and 2 are acceptable.
• Companies that weren’t collecting data when the December 2024 Enforcement Notice was issued can submit a statement on letterhead explaining their non-submission under SB 253. (December 2024 Enforcement Notice)
• Limited assurance is not required for 2026; however, companies are welcome to submit limited assurance.

The Ninth Circuit Stays Enforcement of SB 261

On November 18th, the Ninth Circuit issued an injunction pending appeal for SB 261, but not for SB 253. Since the compliance deadline for SB 253 is later (August 10th, 2026), a decision on the appeal is expected before the obligation takes effect.

Despite the temporary relief for SB 261, companies still face the risk of an immediate disclosure requirement depending on the Ninth Circuit’s ruling. Therefore, the burden to prepare for the compliance obligation remains.

This decision could be viewed as a defensive measure by the Ninth Circuit to avoid immediate review by the Supreme Court. Such a review might result in a decision less favorable to the underlying laws than one from the generally liberal Ninth Circuit.

Learn more at The National Law Review.

A Quick Recap of SB 253 and SB 261

In October 2023, the California state legislature passed two climate bills into law, introducing new climate-related disclosure requirements for large companies operating in the state. These laws require large companies to assess and publicly report their climate-related financial risks (SB 261) and greenhouse gas emissions (SB 253).

SB 253 applies to U.S.-based entities that conduct business in California and have annual revenue exceeding $1 billion. SB 219 allows subsidiaries to combine their SB 253 reports with their parent companies. 

SB 261 applies to U.S.-based entities that conduct business in California and have over $500 million in annual revenue. Notably, insurance companies are excluded from this law since they already have climate reporting requirements.

Access the 11/18/25 workshop materials on CARB’s website.

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Verdis Group is closely following CARB’s implementation of these laws. Our team has the expertise and guidance to collaborate with your organization in assessing risks, calculating scope emissions, and creating a comprehensive report.

Please contact us with any questions about California’s climate disclosure laws: