California’s climate disclosure requirements loom over businesses operating in the state. The California Air Resources Board (CARB) is responsible for promulgating disclosure standards and issuing guidance to companies in scope of SB 261 and SB 253. However, despite compliance deadlines as soon as January 2026, CARB has offered little in the way of concrete rules and guidance. A recent virtual workshop offers some insights into how these climate laws will be implemented. Wilson Sonsini covers key takeaways in a recent memo:
- “The California Air Resources Board (CARB) is actively developing, and taking public feedback on, the definitions of “doing business in California” and “total annual revenue,” which will define the scope of companies covered by California’s corporate greenhouse gas reporting (SB 253) and climate-related financial risk disclosure (SB 261) programs.
- CARB intends to publish an illustrative list of covered companies, but companies must do their own assessment of whether they are covered by SB 253 and SB 261.
- Each company covered by SB 261 must publish its initial climate-related financial risk report (Risk Report) on its website by January 1, 2026, and submit the Risk Report to CARB’s public docket.
- Each covered company will need to pay an annual fee to CARB for each corporate disclosure program that it is subject to; CARB estimates that the annual fee for the first year will be $3,106 for SB 253, and $1,403 for SB 261.”
Despite the lack of guidance, federal courts declined to stay the new California laws. However, there is some good news for companies – CARB indicated that enforcement of the new disclosure laws will be light for the first year of reporting. Companies making good faith efforts to comply are unlikely to see enforcement actions, so the uncertainty surrounding the law may be a little more bearable.
Our members can learn more about climate disclosures here.
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