Overview of California Climate Disclosure Laws SB 253 and 261

California Climate Disclosure: What You Need to Know for 2025

California’s climate disclosure laws are going into effect, and 2025 is the year to prepare. In this guide, you’ll get a clear overview of what the regulations entail, who’s affected, what to report, and how to get started. While this is an educational summary, it’s important to consult your legal team for official compliance actions.

What’s Included in California’s Climate Disclosure Package?

Two new climate laws, SB 253 and SB 261, form the foundation of California’s climate accountability framework. Here’s what you need to know:

SB 253: The Climate Corporate Data Accountability Act

Who must report?

• U.S.-based public or private companies
• Doing business in California
• With annual global revenues over $1 billion

What must be reported?

• Scope 1 & 2 GHG emissions starting in 2026
• Scope 3 GHG emissions starting in 2027

Assurance requirements:

• Limited assurance on Scope 1 & 2 in 2026
• Reasonable assurance on Scope 1 & 2 by 2030
• Limited assurance on Scope 3 by 2030

Reporting methodology:

• Must align with the Greenhouse Gas Protocol

Important nuances:

• The $1B revenue threshold is based on the prior fiscal year’s global revenue (not just U.S. revenue).
• Reports may be consolidated at the parent company level. Subsidiaries don’t need to report separately if included under a parent report.

What does “doing business in California” mean?
The law itself doesn’t define this term yet, but it's likely to follow the California Franchise Tax Board’s (FTB) definition, which includes:

• Having >$690K in sales, or
• >$69K in property or payroll, or
• Being organized or domiciled in California

⚠️ This threshold is not yet confirmed by CARB, but companies above $1B in revenue should assume applicability.

SB 261: The Climate-Related Financial Risk Act

Who must report?

• U.S.-based public or private companies
• With annual global revenues over $500 million

What must be reported?

• Climate-related financial risks and opportunities, including:
  • Governance
  • Risk management
  • Strategy
  • Metrics and targets
  • Measures to mitigate risk

Reporting frequency:

• Every two years
• First report due in 2026, next in 2028

Reporting framework:

• Aligned with the TCFD (Task Force on Climate-related Financial Disclosures) or the ISSB (International Sustainability Standards Board) for global compatibiilty.

What Happens Next?

Implementation oversight:
Both SB 253 and SB 261 will be implemented by the California Air Resources Board (CARB).

Next major milestone:
CARB is expected to release implementing regulations in July 2025. These will provide detailed guidance on:

• Entity definitions
• Reporting mechanisms
• Assurance standards
• Enforcement procedures

How to Start Preparing

Even though some details are still pending, companies can act now by:

✅ Calculating Scope 1, 2, and 3 emissions in alignment with the GHG Protocol
✅ Organizing internal stakeholders to support cross-functional reporting
✅ Aligning climate risk disclosures with the TCFD’s four pillars and 11 recommendations
✅ Staying informed on CARB’s regulatory updates

Final Note

California’s climate regulations represent a shift toward greater accountability and transparency. While full implementation is still evolving, the path forward is clear: start measuring your emissions, assess your climate risks, and prepare to disclose.

Persefoni will continue to update this guidance as CARB publishes further regulations.