California Releases Preliminary List of Companies Covered by New Climate Disclosure Laws

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On September 24, 2025, the California Air Resources Board (CARB) released a preliminary list of covered entities under two new California climate disclosure laws that will require thousands of companies to report, with initial reporting deadlines beginning in 2026.

California’s SB 261 and SB 253, enacted in 2023, apply to companies formed under U.S. law that do business in California and have total annual revenues above certain thresholds:

  • SB 261 ($500 million threshold): Requires biennial disclosure of climate-related financial risk beginning January 1, 2026.
  • SB 253 ($1 billion threshold): Requires annual disclosure of scope 1 and 2 greenhouse gas emissions for the prior fiscal year beginning in 2026, and scope 3 emissions beginning in 2027. CARB has proposed a June 30, 2026, deadline for the first submission.

For each company, the preliminary list indicates whether reporting is required under both laws or only under SB 261.

SB 261 Reporting Guidance

The preliminary list follows CARB’s September 2 release of draft guidance on compliance with SB 261, which clarifies what information covered entities must include in their biennial reports.

Under the draft guidance, covered entities can choose between three reporting frameworks to meet disclosure requirements for four different areas: governance, strategy, risk management, and metrics and targets.  For each reporting area, the draft guidance outlines minimum disclosure requirements.

The draft guidance acknowledges that disclosures “will vary depending on the company, the discretion of the preparers, and the chosen reporting framework.”  CARB also states that a “guiding principle in preparation of these reports should be meeting the needs of the users of the biennial reports,” such as “investors and other stakeholders.”

Notably, CARB is not currently requiring disclosure of scope 1, 2, or 3 emissions for the initial reporting period.  In addition, companies may submit disclosures based on either calendar year or fiscal year data for their first biennial report.