California climate disclosure is now mandatory for the largest companies doing business in the state. The first SB 253 emissions reports are due Nov. 10, 2026, after the California Air Resources Board (CARB) moved the deadline from Aug. 10. SB 261, the companion climate-risk law, is on hold while a federal appeals court hears a challenge to it.
To keep up, we’re taking a high-level look at the most essential California climate disclosure requirements and showing you how to stay compliant with all of them.
Top California climate disclosure laws to follow in 2026
While many California climate disclosure bills have repeatedly been contested and litigated, the ones below are bound to change the future of climate disclosure. We’re exploring what each of them implies, who needs to comply, and how to prepare for the changes.
California climate disclosure SB 253: Climate Corporate Data Accountability Act (CCDAA)
The SB 253 climate reporting regulation requires yearly reporting of information related to Scopes 1, 2 and 3, offering shareholders visibility into everything including outsourcing and constantly moving supply chain efforts. The first Scope 1 and 2 reports are due Nov. 10, 2026. CARB deferred that deadline from Aug. 10 on June 24, 2026, and first-year reports do not need third-party assurance. Limited assurance of Scope 1 and 2 begins with reports filed in 2027, the same year Scope 3 reporting starts, so Scope 3 data collection needs to start now. Penalties can reach $500,000 per reporting year.
Note on Scope emissions:
- Scope 1: Coming directly from a company’s operations such as fuel burned in company vehicles and facilities.
- Scope 2: Indirect ones derived from energy an organization has purchased.
- Scope 3: Occurring throughout the supply chain or when customers use a company’s products.
Who needs to comply with SB 253?
It applies to public and private companies formed in the United States that do business in California and have more than $1 billion in total annual revenue.
How to prepare for SB 253 disclosure:
- Prepare Scope 1-2-3 emissions per the GHG Protocol standards (including data from business partners)
- Increase the emissions data requests you’re sending to suppliers and vendors
- Provide your Scope 1-2 emission data to clients so the latter can add your data to their own reports
- Find any data gaps and review your tech stack to make sure the data you’ll provide is going to be accurate
California climate disclosure SB 261: Climate-Related Financial Risk Act (CRFRA)
SB 261 requires reporting on the financial risks climate change poses to your business. Companies will have to publish a climate-related financial risk report every two years based on Task Force on Climate-Related Financial Disclosures (TCFD) recommendations or the ISSB’s IFRS S2 standard. The report covers physical and transition risks to areas such as operations, supply chains, capital investments and employee health and safety.
Enforcement is on hold. The 9th U.S. Circuit Court of Appeals blocked SB 261 on Nov. 18, 2025, while it hears a challenge from the U.S. Chamber of Commerce. The court heard arguments Jan. 9, 2026, and has not ruled. CARB is not enforcing the law and will set a new deadline when the case ends. A report prepared under another government’s rules, such as CSRD, or a voluntary report using ISSB standards can satisfy SB 261.
Who needs to comply with SB 261?
The risk disclosure framework applies to public and private companies formed in the United States that do business in California and making more than $500 million in yearly revenue (for the past fiscal year).
How to prepare for SB 261 disclosure:
- Analyze your data to identify climate-related risks your company faces across the entire value chain.
- Prioritize these risks and identify potential future vulnerability areas so you can prepare different scenarios to act upon these.
- Track the 9th Circuit case, since CARB will set a new SB 261 deadline when it ends.
- Post all reporting publicly on your website
California climate disclosure AB 1305: Voluntary Carbon Market Disclosures Business Regulation Act (VCMDA)
In case you missed the update, AB 1305 was signed into law by Gov. Gavin Newsom on Oct. 7, 2023, and took effect Jan. 1, 2024.
The California AB 1305 bill provides a reporting framework for companies involved in carbon markets. It promotes transparency and makes carbon credit claims easier to check.
Under the law, companies must disclose details on the carbon offsets they sell or buy, including the project, its registry, the protocol used to estimate reductions and whether a third party verified it. Disclosures go on the company’s website and must be updated at least annually. Nothing is filed with CARB.
Who needs to comply with AB 1305?
The law covers companies that market or sell voluntary carbon offsets in California, plus companies that make net-zero, carbon-neutral or significant-reduction claims in California, including claims backed by purchased offsets. The main reason for staying compliant with this act, other than it’s now mandatory, is that it can show how committed your organization is to climate action and carbon reduction efforts.
How to prepare for AB 1305 disclosure:
- Analyze what your company’s current involvement in carbon markets is and the types of credits you’ve purchased or sold.
- Document the registry, project ID and verification status for every credit you’ve used or plan to buy or sell.
- Launch a reporting strategy to better collect, verify, and share information publicly on your carbon market participation.
Automate your California climate disclosure compliance
Keeping up with the complexities of data management can be challenging without automation. Tracera uses AI to pull emissions data from utility bills, invoices and PDFs into one record with a full audit trail.
Schedule your demo today to simplify California climate compliance for you and your partners!