The US state of California has passed two landmark bills that will have implications on thousands of companies. Senate Bill No. 253, or the “Climate Corporate Data Accountability Act” and Senate Bill No. 261, or “Greenhouse gases: climate-related financial risk.” These bills are among the first in a paradigm shift from a voluntary climate-related reporting landscape to a mandatory one. Impacted companies will be required to report their Scope 1, 2, and 3 greenhouse gas emissions and their climate-related financial risks. We’ve created this quick guide with the key points highlighted from the legislation.
SB 253, Climate Corporate Data Accountability Act (CCDAA)
Who is affected?
Any entity with total annual revenues exceeding $1 billion that does business in California.
What is required?
Disclosure of Scope 1, 2, and 3 greenhouse emissions, as defined by the Greenhouse Gas Protocol standards.
When does it come into effect?
Scope 1 & 2 Emissions disclosures are due in 2026, and Scope 3 Emissions disclosures are due in 2027.
Where does this need to be reported?
Emissions reports must be posted publicly on your website.
What are the penalties for non-compliance?
You can be fined up to $500,000.
SB 261, Greenhouse gases: climate-related financial risk (CRFRA)
Who is affected?
Any entity with total annual revenues exceeding $500 million that does business in California.
What is required?
A climate-related financial risk report in line with the Task Force on Climate-Related Financial Disclosure (TCFD).
When does it come into effect?
The first report is due by January 1, 2026, and each subsequent report is due biennially.
Where does this need to be reported?
Climate-related financial risk reports must be posted publicly on your website.
What are the penalties for non-compliance?
You can be fined up to $50,000.
CarbonSuite Compliance Checklist
CarbonSuite can help you with disclosure each step of the way. Get in touch with us to get started!
California Compliance Checklist V2