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Webinar Q&A

• Will CA AB 2331 or its successor be reintroduced in the next legislative cycles?
  • Unfortunately at this time we do not have insight into the next legislative cycle as it relates to AB 2331.
• Is CARB on target for issuing its July 1, 2025, regulations?some text
  • As of now, we have no evidence that CARB would miss their July 1, 2025 target for implementing regulations. As of their latest enforcement letter news on December 5th, they maintained that timeline.
• Is scenario analysis required under SB 261?
  • Since SB 261 aligns with TCFD, scenario analysis is considered an important tool for assessing and understanding climate risks under different plausible futures. As of now, it is our understanding that it is required, however further insight from CARB is needed.

• The timing for CA SB-261 is stated as "January 1, 2026." Does this imply that the report can be furnished at any point during the calendar year 2026, or does it need to be furnished by January 1, 2026?
  • We will need to wait for CARB’s implementing regulations to know the deadline within 2026 but we do expect the Jan 1 deadline will be extended into Q1 or Q2 to allow companies time to gather and report the prior year’s data.
• How can SB 261 be Jan 1, 2026, for 2025 data? I don't believe most companies are able to file their ISSB or TCFD report so quickly after 2025. Can you please advise?some text
  • Jan 1 is the date in the legislation, but it is likely that CARB will extend the deadline into Q1 or Q2.
• The language of SB 261 is really vague. I have heard that CSRD and California Climate are similar on the "environmental portion." Can companies leverage the double materiality assessment (CSRD-focused) for the California climate risk assessment? What can we use with what we already have? Can we fulfill the ask of SB 261 with what most companies are currently trying to achieve with other mandatory reporting like CSRD?some text
  • SB 261 legislative text requires the disclosure of climate-related financial risks (physical and transition) and measures taken to mitigate the risk in accordance with TCFD or, optionally, ISSB. Right now the legislative text does not mention interoperability or flexibility with the CSRD.

• Is CDP still being considered a means for disclosure for either of these state bills?
  • As of now, this still has yet to be determined by CARB. The specific reporting mechanism (reporting to CARB or a third-party entity such as CDP) will be determined by the regulations CARB puts out.

• Can we review what "limited" vs. "reasonable" assurance means?
  • Limited assurance provides a moderate level of confidence in reported data through inquiries and analytical procedures rather than in-depth testing. The assurance provider checks for material misstatements and issues a report stating that nothing significant was found to cause the assurance provider to believe the information in the report is not accurate. This differs from reasonable assurance, which requires the assurance provider to make a finding that the information reported is accurate in all material respects.

• How does CDP fit into the Climate Risk Analysis (TCFD) data for SB 261?
  • For SB 261, the legislation says that a TCFD-aligned report on the reporting company’s website will be compliant. There is no indication at this time that CDP will be used for submitting SB 261 disclosures. However, CDP itself is TCFD and now ISSB aligned so much of the climate risk data is interoperable between reporting needs.

• Is this all done through a CPA?
  • The legislation for SB 253 does not specify that CPAs are required.  The legislation says that assurance providers shall be:some text
    • Independent third-party
    • ‘Have significant experience’
    • ‘Act in accordance with professional standards and applicable legal and regulatory requirements.
    • In 2030, requirements may be updated.

• On 12/5, CARB issued an enforcement notice re: CA SB-253, stating that for the first report due in 2026, reporting entities may submit scope 1 and scope 2 emissions from the prior fiscal year. CARB will not take enforcement action for incomplete reporting as long as companies make a good-faith effort.
  • That's correct! Important for companies to take note of, however, please know that disclosure in 2026 is still required and now is the time to prepare!

• Can you speak to the impact of SB 219 on the two bills previously mentioned?
  • SB 219 introduces technical amendments to SB 253 and SB 261, without major changes to their scope or timelines. It gives the California Air Resources Board (CARB) six additional months to finalize the regulations, with a new deadline of July 2025. Notable changes include:
    • Provisions allowing CARB to decide whether to manage disclosures in-house or contract with a third party 
    • Language permitting companies with subsidiaries to roll up their data into a single disclosure at the parent level
    • A phased approach to scope 3 reporting, with submissions due later in the fiscal year than scope 1 and 2 data

• Is ISSB reporting a mandatory requirement like CA 253 and 261?
  • No, it is voluntary until adopted into regulation across jurisdictions.