California's Climate Disclosure Laws
SB 253 & SB 261 Compliance Made Simple with Clearyst°
Take the complexity out of SB 253 and SB 261 reporting with software and expert advisory. Measure emissions, assess climate risk, and disclose with confidence.
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Understanding SB 253 & 261
California’s SB 253 and SB 261 are groundbreaking climate disclosure laws reshaping how businesses approach emissions, risk, and transparency. At Clearyst, we help companies measure, manage, and disclose with confidence - turning regulatory requirements into opportunities for innovation, growth, and leadership.
Climate corporate data accountability act
SB 253
California's SB 253 (Climate Corporate Data Accountability Act) mandates that large U.S. companies operating in California publicly report their GHG emissions
Who It Impacts:
- Public & Private entities
- Doing business in California
- $1B+ Revenue
Reporting Requirements:
- Annual disclosure of Scope 1, 2, and 3 emissions data in line with the GHG Protocol
- Starting in 2026, Scope 1 and 2 emissions disclosures require limited assurance, upgrading to reasonable assurance in 2030 - when Scope 3 also becomes subject to limited assurance
Timelines:
- August 10, 2026 - Scope 1 and 2 emissions, using 2025 data
- 2027 - Scope 3 emissions also included, using 2026 data
- 2030 - Scope 1 and 2 disclosures require reasonable assurance; Scope 3 disclosures require limited assurance
Fees:
- Estimated fees between $2,000 and $7,000 per in-scope entity
Climate-related financial risk disclosure act
SB 261
California's SB 261 requires businesses to disclose climate-related financial risks. Knowing if your company is subject to the law, and what compliance entails, is the critical first step.
Who It Impacts:
- Public & Private entities
- Doing business in California
- $500M+ Revenue
Reporting Requirements:
- A biennial climate-related financial risk report aligned with TCFD or ISSB frameworks
- Explanation of the measures taken to address and adapt to identified risks
- ExplanatioNote: CARB has clarified that Scope 1, 2, and 3 emissions reporting is not required for the initial 2026 report, avoiding duplication with SB 253n of the measures taken to address and adapt to identified risks
Timelines:
- Enforcement of SB 261 has currently been paused. CARB has opened a voluntary docket for companies to submit reports. Stay tuned for the latest updates (link to Clearyst newsletter)
- 2026 - Voluntary reporting open through July 1, 2026
- 2028 and beyond - Reports updated every two years thereafter
Fees:
- Estimated fees between $2,000 and $7,000 per in-scope entity
Understanding SB 253 & 261
California’s SB 253 and SB 261 are groundbreaking climate disclosure laws reshaping how businesses approach emissions, risk, and transparency. At Clearyst, we help companies measure, manage, and disclose with confidence - turning regulatory requirements into opportunities for innovation, growth, and leadership.
Climate corporate data accountability act
SB 253
SB 253 requires large corporations to disclose their GHG emissions publicly across three scopes:
Scope 1:
Direct emissions from owned or controlled sources.
Scope 2:
Indirect emissions from purchased electricity, steam, heating, and cooling.
Scope 3:
All other indirect emissions in a company’s value chain, including supply chain and product lifecycle emissions.
Who does SB 253 apply to?
SB 253 applies to companies with annual revenues exceeding $1 billion that do business in California. These companies must submit annual emissions reports verified by a third party.
Who does SB 261 apply to?
SB 261 applies to companies with annual revenues exceeding $500 million doing business in California. These companies must submit biennial reports detailing their climate-related financial risks and mitigation strategies.
Why SB 253 matters
SB 253 goes beyond disclosure - it sets the stage for how investors, customers, and regulators evaluate your company’s performance. Meeting these requirements builds trust and positions your business as a forward-thinking sustainability leader.
Climate-related financial risk disclosure act
SB 261
SB 261 focuses on financial risk transparency. It requires companies to:
•
Assess and disclose climate-related financial risks.
•
Report on strategies to mitigate these risks and adapt to climate change.
Why SB 261 matters
SB 261 pushes companies to integrate climate risk into strategic planning. Doing so not only meets regulatory requirements but also strengthens resilience, reduces exposure, and can reveal new opportunities for innovation.
Climate corporate data accountability act
SB 253
SB 253 requires large corporations to disclose their GHG emissions across three scopes publicly:
Scope 1:
Direct emissions from owned or controlled sources.
Scope 2:
Indirect emissions from purchased electricity, steam, heating, and cooling.
Scope 3:
All other indirect emissions in a company’s value chain, including supply chain and product lifecycle emissions.
Who does SB 253 apply to?
SB 253 applies to companies with annual revenues exceeding $1 billion that do business in California. These companies must submit annual emissions reports verified by a third party.
Why SB 253 matters
SB 253 goes beyond disclosure - it sets the stage for how investors, customers, and regulators evaluate your company’s performance. Meeting these requirements builds trust and positions your business as a forward-thinking sustainability leader.
Climate-related financial risk disclosure act
SB 261
SB 261 focuses on financial risk transparency. It requires companies to:
Assess and disclose climate-related financial risks.
Report on strategies to mitigate these risks and adapt to climate change.
Who does SB 261 apply to?
SB 261 applies to companies with annual revenues exceeding $500 million doing business in California. These companies must submit biennial reports detailing their climate-related financial risks and mitigation strategies.
Why SB 261 matters
SB 261 pushes companies to integrate climate risk into strategic planning. Doing so not only meets regulatory requirements but also strengthens resilience, reduces exposure, and can reveal new opportunities for innovation.
Streamline SB253 and SB261 disclosure with Clearyst
At Clearyst, we specialize in simplifying compliance with complex environmental regulations like SB 253 and SB 261. Our comprehensive services are designed to help your business not only meet these requirements but also improve your sustainability performance. Here’s how we can support you:
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Step 1. GHG Emissions Measurement
Collect, organize and report audit-ready data across Scope 1, 2, and 3 emissions with Clearyst and our verified platform partners.
Step 2. Climate Risk Assessment
Identify climate-related financial risks, establish corporate governance, and craft clear, compliant California SB 261 disclosure reports.
Step 3. Assurance
Ensure your reports meet regulatory standards and pass assurance requirements
Step 4. Ongoing Support & Improvement
Stay ahead of evolving regulations with the latest updates and expert guidance.
Step 5. Sustainability Strategy Development
Move beyond California SB253 and California SB261 compliance. Work with the Clearyst team to develop sustainability policies and procedures aligned with broader business objectives. Leverage data for other reporting needs and take steps to improve performance.
Why Choose Clearyst?
Expertise
You Can Trust
Our team of sustainability and compliance experts has a proven track record of helping businesses navigate complex regulations.
End-End
Solutions
We handle everything from data collection to reporting and strategy development.
Future
Focused
We don’t just help you comply. We help you lead in sustainability, building resilience and trust with your stakeholders.
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SB 253 and SB 261 FAQ Section
1. How do I know if SB 253 and SB 261 apply to my company?
a. Your company is in scope for California SB 253 if you:
- Conduct business in California
- Generate $1B+ Revenue
b. Your company is in scope for California SB 261 if you:
- Conduct business in California
- Generate $500M+ Revenue
- Conduct business in California
- Generate $1B+ Revenue
b. Your company is in scope for California SB 261 if you:
- Conduct business in California
- Generate $500M+ Revenue
2. What does “doing business in California” actually mean?
Manufacturers, importers, and brand owners who produce or sell products that generate waste, such as packaging.
3. What emissions must be reported under California SB 253?
Companies must disclose all three scopes of greenhouse gas emissions following the GHG Protocol required for California SB 253 reporting:
- Scope 1: direct emissions from owned sources.
- Scope 2: indirect emissions from purchased electricity and energy.
- Scope 3: all other indirect emissions through the value chain.
SB 253 requirements will be phased in:
- 2026: Scope 1 and 2 with limited assurance.
- 2027: Scope 3 emissions.
- 2030: Scope 1 and 2 with reasonable assurance.
- Scope 1: direct emissions from owned sources.
- Scope 2: indirect emissions from purchased electricity and energy.
- Scope 3: all other indirect emissions through the value chain.
SB 253 requirements will be phased in:
- 2026: Scope 1 and 2 with limited assurance.
- 2027: Scope 3 emissions.
- 2030: Scope 1 and 2 with reasonable assurance.
4. When are the reporting deadlines for both SB 253 and SB 261?
a. California SB 253 - Scope 1 and 2 report due August 10, 2026 covering fiscal year 2025 data. Scope 3 reporting will begin in 2027.
b. California SB 261 - enforcement is currently paused. The first climate risk report would have been due January 1, 2026, with updates every two years thereafter.
b. California SB 261 - enforcement is currently paused. The first climate risk report would have been due January 1, 2026, with updates every two years thereafter.
5. How can companies comply with EPR regulations?
a. California SB 253 carries penalties up to $500,000 annually for non-compliance or insufficient reporting. California SB 261 has penalties up to $50,000 per reporting year.
b. Both regulations also include administrative fees: $3,106 annually for SB 253 entities and $1,403 annually for SB 261 entities to cover program implementation costs.
b. Both regulations also include administrative fees: $3,106 annually for SB 253 entities and $1,403 annually for SB 261 entities to cover program implementation costs.
6. What does the “good faith” safe harbor mean?
This provision in California SB 253 protects companies from penalties for misstatements in Scope 3 emissions reporting, provided the disclosures are made on a reasonable basis and in good faith. This acknowledges the inherent difficulty in collecting comprehensive supply chain data and encourages companies to begin reporting even with imperfect information.
7. What must be included in a California SB 261 climate risk report?
a. Companies must publish reports aligned to one of the following frameworks:
- TCFD (Task Force on Climate-Related Financial Disclosures)
- IFRS S2 (ISSB)
- Another regulated government or exchange-mandated framework
b. Reports must address four key pillars: governance (board oversight and management roles in climate decisions), strategy (how climate risks affect business planning), risk management (processes for identifying and managing climate threats), and metrics and targets (data used to assess climate performance). CARB has clarified that detailed emissions aren't required for the initial 2026 report to avoid duplicating SB 253 data.
- TCFD (Task Force on Climate-Related Financial Disclosures)
- IFRS S2 (ISSB)
- Another regulated government or exchange-mandated framework
b. Reports must address four key pillars: governance (board oversight and management roles in climate decisions), strategy (how climate risks affect business planning), risk management (processes for identifying and managing climate threats), and metrics and targets (data used to assess climate performance). CARB has clarified that detailed emissions aren't required for the initial 2026 report to avoid duplicating SB 253 data.
8. Do subsidiaries need to file separately?
Subsidiaries may report at the parent company level for compliance purposes. However, administrative fees apply to each separate legal entity meeting California's "doing business" criteria, meaning corporate families may face multiple fee obligations even when consolidating their climate disclosures into unified reports.
Get Started Today
Navigating SB 253 and SB 261 doesn’t have to be overwhelming. With Clearyst by your side, you can achieve compliance, reduce your environmental impact, and use sustainability as a strategic business advantage.
Contact us to learn more about how we can help your company comply with SB 253 and SB 261 while driving meaningful improvements in your sustainability efforts.
Contact us to learn more about how we can help your company comply with SB 253 and SB 261 while driving meaningful improvements in your sustainability efforts.
Speak with an Advisor
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September 9, 2025
An Overview of California's Climate Disclosure Laws: SB 253 and SB 261An Overview of California's Climate Disclosure Laws: SB 253 and SB 261In this article, we’ll provide an overview of California's two climate disclosure laws, key deadlines and requirements, penalties for non-compliance, and how we at Clearyst can ensure compliance for your organization.
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