Navigate California’s SB 253 & SB 261 climate disclosure laws with confidence

SB 253 and SB 261 are California’s landmark climate disclosure laws that require large companies doing business in the state to report greenhouse gas emissions and climate-related financial risks. SB 253 mandates public emissions reporting, while SB 261 requires TCFD-aligned climate risk disclosure. Together, they strengthen U.S. climate transparency and investor accountability.

SB 253 applies to entities with annual revenues over $1 billion, and SB 261 applies to entities with annual revenues over $500 million, that are “doing business” in California. Under California tax law, this includes any company with significant sales, property, or payroll in the state that exceeds statutory thresholds. Both laws apply to public and private companies meeting these criteria.

SB 253 focuses on quantitative disclosure of Scope 1, Scope 2, and Scope 3 GHG emissions, verified by an independent assurer. SB 261 requires qualitative reporting of climate-related financial risks and mitigation strategies in line with TCFD principles. In short, SB 253 measures carbon; SB 261 evaluates climate risk exposure.

SB 261 disclosures begin in 2026 for the 2025 fiscal year, while SB 253 emissions reporting starts in 2027 based on 2026 data. Companies must submit their reports to the California Air Resources Board (CARB)—annually for SB 253 and biennially for SB 261. CARB will finalise assurance and reporting guidance by mid-2025.

SB 253 requires disclosure of Scope 1 (direct emissions), Scope 2 (indirect energy emissions), and Scope 3 (value-chain emissions), aligned with the GHG Protocol. Scope 3 disclosure will be phased in after 2027 to allow companies to develop measurement capabilities. Integrum ESG automates Scope 1–3 data capture using verified models and emissions databases.