California Climate Disclosure: The Path Ahead for Companies

California Climate Disclosure: The Path Ahead

At this point, most companies aren’t asking “Should we prepare?” They’re asking what exactly to do first, and how to build a realistic timeline toward compliance.

The goal of this lesson is to summarize what companies can do over the next few years to prepare for California climate disclosure. While SB 253 and SB 261 differ in content (emissions vs. climate risk narratives), the readiness path is similar: build your baseline, document your approach, engage the right stakeholders early, and improve over time.

CARB has also emphasized that it is focused on supporting compliance as the programs begin, including first-year flexibility for SB 253 submissions.

A practical readiness roadmap (2026 through 2030)

Below is a streamlined timeline that reflects CARB’s latest proposed deadlines and guidance.

Note: CARB has stated that subsequent SB 253 rulemaking will address items like data assurance requirements, recurring deadlines beyond 2026, reporting templates, and enforcement provisions.

So while the statute sets direction, details may continue to evolve through CARB’s regulatory process.

What Companies Can Do Now

The video emphasized that readiness is less about hitting a single compliance date and more about building durable reporting and governance capabilities. CARB’s recent updates reinforce that approach by allowing flexibility in early years while signaling higher expectations over time.

1. Build Your Scope 1 and Scope 2 Baseline Early

(Even before your first regulated submission)

A foundational readiness step is to calculate Scope 1 and Scope 2 emissions for a prior reporting year (for example, 2024 or 2025), well ahead of your first SB 253 submission. This allows companies to pressure-test their processes before regulatory deadlines apply.

Early baseline work gives teams time to:

• Identify data gaps and quality issues
• Standardize activity data collection across the organization
• Validate calculation methodologies and assumptions
• Establish clear ownership and accountability

The value here is not achieving “perfect” numbers, but building the internal muscle to produce emissions data reliably and repeatably, which is ultimately what CARB and assurance providers will be looking for.

2. Document the Story of Your Inventory as You Build It

(Documentation is the fastest way to reduce future friction)

If companies do only one thing to reduce future compliance and assurance pain, it should be documentation.

As Scope 1 and Scope 2 emissions are calculated, companies should clearly document:

• What was included in organizational and operational boundaries (and why)
• Data sources used for each emissions category
• Calculation methodologies, emission factors, and GWPs applied
• Where estimates, proxies, or assumptions were required

This documentation becomes a single source of truth that supports:

• SB 253 reporting consistency
• Future assurance readiness
• Internal governance and auditability

In practice, this is often where organizations uncover the need for stronger controls, clearer data ownership, and better data lineage—insights that are far easier to address early than under regulatory pressure.

3. Consider An Assurance Test Run, Anchored to CARB’s First-Year Flexibility

Although CARB has stated that limited assurance will not be required for 2026 SB 253 reporting, companies should still consider an performing an assurance test-run.

A practical, CARB-aligned approach is to:

• Use 2026 to establish repeatable reporting mechanics and strong documentation
• Deploy assurance pilots selectively, where they help identify gaps or control weaknesses early
• Avoid assuming full assurance must be completed before the first regulated submission

This allows companies to benefit from assurance insights without prematurely over-engineering processes before CARB’s assurance requirements fully phase in.

SB 261 Readiness: Start Narrative Development in Parallel

As emissions baseline work progresses, SB 261 readiness can, and should, begin in parallel. Unlike SB 253, SB 261 is narrative-forward, focusing on how a company governs, assesses, and manages climate-related financial risk.

Although CARB has stated it will not enforce the January 1, 2026, reporting deadline while the injunction remains in effect, the underlying work remains valuable. It aligns closely with global best practices and other climate disclosure regimes.

A good starting point is to convene the right stakeholders:

• Legal and compliance
• Finance and controllership
• Enterprise risk management
• Sustainability or climate leads
• Internal audit (where applicable)

From there, companies can begin drafting initial disclosures aligned with the four pillars referenced by CARB, informed by TCFD and ISSB frameworks:

• Governance
• Strategy
• Risk Management
• Metrics and Targets

CARB’s checklist approach makes clear that early-stage reporters are permitted to disclose gaps, limitations, and assumptions. This is not a failure. It is an intentional feature of the rule, designed to support progressive maturity over time.

Final Thoughts

California’s climate laws are part of a broader shift toward standardized, transparent climate disclosure. Taking action now, by building emissions inventories, engaging auditors, and drafting TCFD-aligned narratives, can help reduce risk and position your company for long-term regulatory and stakeholder confidence.

Thank you for joining Persefoni’s California Climate Disclosure course. Our team is here to support you with updates and guidance every step of the way.

🎓Request Your Certificate of Completion

Congratulations on completing our California SB 253 and SB 261 workshop! To receive your official Certificate of Completion, please fill out the form below with your details. Ensure all information is accurate to avoid any delays in processing your certificate.

Please note: Certificates will be issued within two weeks of submission.