FAQ Update from CARB: Navigating Clearer Climate Disclosures in California
The California Air Resources Board (CARB) has released a FAQ document to provide clarifications on the state's climate disclosure laws, SB 253 and SB 261. The document, released on June 9th, 2025, aims to assist companies with initial planning, including for submitting climate-related financial risk reports and greenhouse gas (GHG) emissions reports.
The FAQ document is an important step in enhancing transparency and corporate accountability without undue burden. CARB's guidance points to a pragmatic, flexible, and non-punitive approach to help businesses meet the requirements of the climate disclosure laws.
SB 253 (Climate Corporate Data Accountability Act)
Under SB 253, companies with revenues over $1 billion must disclose Scope 1, 2, and 3 GHG emissions. Reporting for Scope 1 and 2 emissions begins in 2026, covering Fiscal Year 2025 data. Scope 3 emission reporting starts in 2027 for Fiscal Year 2026 data.
Limited assurance (third-party verification) is required for Scope 1 and 2 emissions through 2029. Starting in 2030, reasonable assurance (a higher level of verification) will be required for Scope 1 and 2 emissions, with CARB deciding then on assurance levels for Scope 3 emissions. CARB emphasizes alignment with recognized standards like the Greenhouse Gas Protocol (GHG Protocol).
SB 261 (Climate-Related Financial Risk Disclosure Act)
SB 261 requires companies to submit biennial reports on material climate-related financial risks. The first SB 261 report is due January 1, 2026, and then every two years thereafter. CARB encourages using established frameworks such as the Task Force on Climate-Related Financial Disclosures (TCFD) or International Sustainability Standards Board (ISSB) standards for risk disclosures.
Additional Clarifications and Guidance
Despite some flexibility in applicability and exemptions under consideration, CARB has maintained firm deadlines for reporting. CARB is pursuing a pragmatic and non-punitive approach, aiming to help companies build the necessary infrastructure and programs for compliance without undue burden. CARB plans to publish prescriptive formal rules by the end of 2025.
These laws align California with global climate disclosure trends, reflecting moves like the EU’s Corporate Sustainability Reporting Directive (CSRD) and the U.S. SEC’s proposed rules.
The public docket for SB 261 reports will be posted by CARB on December 1, 2025, and will remain open until July 1, 2026. For the first year reports under SB 261, companies can use FY 2023/2024 or FY 2025/2025 data. CARB is continuing to solicit feedback on definitions for "doing business" and "revenue" that would define applicability under both SB 253 and SB 261, as well as allowable exemptions.
Alyssa Zucker, Senior Industry Principal at Workiva, is leading the company's strategy for customer-facing climate and sustainability content. Her 15 years of corporate sustainability experience guides the program recommendations, emissions accounting, and sustainability disclosure featured in the Workiva Carbon solution.
These updates help companies understand their obligations better and prepare for the upcoming climate data and risk disclosures.
[1] California Air Resources Board. (2025). FAQ: Climate Corporate Data Accountability Act (SB 253) and Climate-Related Financial Risk Disclosure Act (SB 261). Retrieved from https://www.arb.ca.gov/cc/scd/faq
[2] California Air Resources Board. (2025). Workshop on California's climate disclosure laws SB 253 and SB 261. Retrieved from https://www.arb.ca.gov/cc/scd/workshop
[3] California Air Resources Board. (2025). Public workshop on May 29th, 2025, regarding California's climate disclosure laws SB 253 and SB 261. Retrieved from https://www.arb.ca.gov/cc/scd/public-workshop
- The FAQ document released by California Air Resources Board (CARB) provides guidance for businesses to understand their obligations under SB 253 and SB 261, which involve disclosing climate-related financial risks, GHG emissions, and embracing corporate sustainability principles.
- SB 253 mandates that companies with revenues over $1 billion report their Scope 1, 2, and 3 GHG emissions, with limited assurance required for Scope 1 and 2 emissions until 2029, and a shift to reasonable assurance starting in 2030.
- SB 261 requires companies to submit biennial reports on material climate-related financial risks, using established frameworks like the TCFD or ISSB standards for risk disclosures. The public docket for initial SB 261 reports will be open from December 1, 2025, to July 1, 2026.
