California Climate Disclosure Compliance (SB 253 & SB 261)

California’s climate disclosure laws (SB 253 and SB 261) require thousands of companies to report greenhouse gas emissions and climate-related financial risks starting in 2026. At Verdis Group, our team provides comprehensive compliance support, including GHG inventories, TCFD- and IFRS S2-aligned reporting, materiality assessments, and third-party assurance to help organizations meet California Air Resources Board (CARB) requirements on time and with confidence.

Whether you’re preparing your first GHG inventory or enhancing existing disclosures for California’s mandates, our sustainability consultants handle the technical complexity, allowing your team to focus on core business operations while reducing regulatory, audit, and reputational risks.

Who needs to comply with California’s climate disclosure laws?

California’s climate disclosure requirements apply to both public and private companies doing business in California that meet specific revenue thresholds:

SB 253 (Climate Corporate Data Accountability Act)

– Companies with total annual revenues exceeding $1 billion
– SB 219 allows subsidiaries to combine their SB 253 reports with their parent companies.

SB 261 (Climate-Related Financial Risk Act)

– Companies with total annual revenues exceeding $500 million*
– Must disclose climate-related financial risks aligned with TCFD recommendation or IFRS S2
– Biennial reporting (every two years)

“Doing business in California” is broadly defined and includes companies with significant sales, operations, employees, or assets in the state, even if headquartered elsewhere.

*Several exclusions exist

What do California’s climate disclosure laws require?

SB 253: Greenhouse Gas Emissions Reporting

Organizations subject to SB 253 must prepare an annual report disclosing Scope 1 and 2 greenhouse gas emissions starting in 2026 and obtain third-party verification of the inventory starting in 2027. Scope 3 emissions disclosures will be required in addition to Scope 1 and 2 beginning in 2027.

SB 261: Climate-Related Financial Risk Disclosure

Organizations subject to SB 261 must prepare climate-related financial risk reports that are aligned with the Task Force on Climate-Related Financial Disclosures’ (TCFD) or the ISSB IFRS S2.

Key Dates for California Climate Disclosure

December 1, 2025: SB 261 public docket opened for companies to post a link to their climate and financial risk reports.

January 1, 2026: Statutory deadline to submit report under SB 261, with a required biennial cadence. On December 1, 2025, CARB issued an Enforcement Advisory stating that it will not enforce this deadline until an ongoing appeal is resolved. However, covered entities may voluntarily submit their completed disclosure reports to the public docket.

August 10, 2026 (proposed): For SB 253, companies will have to file their Scope 1 and 2 disclosures using FY 2025 data.. Limited assurance on Scope 1 and 2 will not be required.

2027: Scope 3 disclosures begin for FY 2026 data (exact due-date structure yet to be set by CARB). Scope 3 is under a safe harbor until 2030, meaning that there will be no penalties for good-faith misstatements. However, there will be penalties for non-filing. Limited assurance requirements kick in for Scope 1 and 2.

2030: Companies must have reasonable assurance for Scope 1 and 2, and limited assurance begins for Scope 3.

How Verdis Group helps prepare you for California Climate Disclosure

Whether you’re filing your first GHG inventory or enhancing existing climate disclosures for California compliance, Verdis Group provides tailored support at every maturity level, from initial data collection to third-party assurance readiness.

Our sustainability consultants handle the technical complexity of SB 253 and SB 261 compliance, from Scope 3 emissions calculations to climate-related risk disclosure report preparation, so your team can focus on core business operations.

Our California Climate Disclosure Services

Tracking CARB Updates
We track CARB workshops/guidance and translate changes into concrete steps for your teams.

Greenhouse Gas Inventories (Scope 1, 2, & 3)
Our consultants collaborate closely with your team to develop comprehensive greenhouse gas inventories following GHG Protocol standards and CARB guidance. 

GHG Verification
Our team of experts provides independent verification and limited assurance for clients’ existing Scope 1, 2, and 3 GHG emissions inventories. Our verification process follows the globally recognized AA1000 v3 assurance standard. 

Gap Analysis & Readiness Assessments
We evaluate your current data collection capabilities, reporting processes, and organizational readiness against SB 253 and SB 261 requirements. Our assessment identifies missing data sources, control weaknesses, and implementation gaps so you can prioritize resources effectively.

TCFD- and IFRS S2-Aligned Financial Risk Disclosure
For organizations subject to SB 261, we guide you through climate risk assessments, scenario analysis, and disclosure preparation aligned with TCFD or IFRS S2 recommendations. Our materiality assessments help identify which climate risks genuinely impact your financial performance, operations, and strategic planning.

Third-Party Assurance Preparation
We prepare your organization for third-party verification by establishing robust data controls, documentation systems, and calculation methodologies. 

Data Management Systems & Controls
Beyond first-year compliance, we help you build a sustainable data collection and reporting infrastructure. 

Verdis Group meets you where you are

Recognizing that organizations exist anywhere between novice and expert in their reporting efforts, Verdis Group provides organizations with needs-based, comprehensive compliance support, encompassing gap analyses, market research, materiality assessments, climate impact projections, report writing, and assurance. Our sustainability consultants will guide your team through the process to lighten your workload and ensure compliance.

We meet you where you are to meet compliance requirements and build toward long-term resilience:

Assessment: Understanding your current state and regulatory requirements

Strategy: Developing compliance frameworks that align with your values

Implementation: Building systems and processes for ongoing reporting

Integration: Connecting disclosure work to long-term resilience goals

Take the next step toward California compliance

Organizations that meet SB 253 or SB 261 criteria must act now to prepare for the 2026 deadlines. Verdis Group has the expertise and guidance to collaborate with your organization in assessing regulatory exposure, calculating Scope 1, 2, and 3 emissions, preparing climate risk disclosures, and coordinating third-party assurance.

Our consultants will assess your current capabilities, identify compliance gaps, and create a customized roadmap to meet California’s reporting deadlines with confidence.

Not subject to California’s requirements but facing other climate disclosure mandates? Explore our comprehensive climate disclosure compliance services for CSRD, SEC, and other frameworks.