On August 10, large companies doing business in California will be required to submit their first annual greenhouse gas (GHG) emissions reports under California’s Climate Corporate Data Accountability Act (SB 253). Meanwhile, the US Securities and Exchange Commission (SEC) has formally proposed to rescind its climate-related disclosure rules, which never went into effect. This post provides an update on climate disclosure activity across the country and highlights key developments for covered entities.
California
Mandatory GHG Emissions Disclosures Coming; Climate-Related Financial Risk Reporting Remains Paused
By August 10, 2026, companies doing business in California with over $1 billion in annual revenue must submit their first GHG emissions reports under SB 253. First-year reports will cover Scope 1 and Scope 2 emissions only; Scope 3 reporting is not required until 2027. The California Air Resources Board (CARB)—the agency tasked with implementing and enforcing the state’s climate disclosure laws—has stated that it will exercise enforcement discretion for good faith first-year submissions. Companies that were not collecting emissions data when CARB issued its December 2024 enforcement notice are not required to report, but each such company must submit to CARB a statement on company letterhead stating that it will not provide a 2026 report for this reason. These companies will need to begin reporting in 2027.
There is no mandatory format for reporting GHG emissions in 2026. CARB posted a Scope 1 and Scope 2 reporting template but stated that the reporting template is voluntary for the 2026 reporting cycle. At CARB’s March 2026 virtual workshop, the agency said that it will release information on the 2026 reporting intake process, including more information about reporting format requirements and a submissions portal, but it has not yet published additional information.
Reporting under California’s Climate-Related Financial Risk Act (SB 261), however, remains paused. SB 261 applies to companies doing business in California with over $500 million in annual revenue. Compliance remains voluntary while enforcement is enjoined by the Ninth Circuit pending resolution of Chamber of Commerce v. Sanchez, in which parties have challenged SB 254 and SB 261 on First Amendment grounds, alleging that the laws unconstitutionally compel corporate speech. If the injunction is lifted, initial SB 261 reports may become due within weeks of the Ninth Circuit decision.
CARB Rulemaking
In February 2026, CARB adopted an initial regulation to implement SB 253 and SB 261 and began developing additional regulations addressing SB 253’s Scope 3 emissions reporting requirements. The initial regulation formalized SB 253’s August 10 reporting deadline, clarified key definitions and established a fee structure for the program. CARB submitted the regulation to the California Office of Administrative Law (OAL) on May 20 and it will take effect upon OAL’s approval.
In March 2026, CARB held a public workshop introducing pre-rulemaking concepts for future SB 253 regulations that are expected to govern reporting beginning in 2027. CARB accepted comments through June 1 and received submissions reflecting a range of industry perspectives. Many comments supported alignment with international standards, flexibility in defining organizational boundaries and reconsideration of cost estimates. Views diverged on whether Scope 3 reporting should be comprehensive or phased in by category. CARB is next expected to draft regulatory text and issue a Notice of Proposed Rulemaking, followed by a 45-day public comment period.
Enforcement Risk
In the first year of reporting, CARB has indicated that it plans to exercise its enforcement discretion for companies that “demonstrate good faith efforts to comply” with SB 253’s GHG emissions disclosure obligations. Recognizing that these laws are the first of their kind in the United States, CARB stated in its December 2024 enforcement notice that it “will not take enforcement action for incomplete reporting” in 2026, affording companies some level of flexibility in the transition period to mandatory reporting. For example, as noted above, companies that were not collecting emissions data as of December 2024 are not required to report in 2026. In addition, independent third-party assurance is not required for 2026 reporting. Further, CARB has indicated that it will accept GHG emissions disclosures in various forms—either on CARB’s voluntary reporting template or in other formats—which may include existing company emissions reports, if such reports contain the GHG emissions information required under SB 253.
Other States
Several other states, including New York, New Jersey and Illinois, have introduced Climate Corporate Data Accountability acts modeled on California’s SB 253, but none have yet been enacted into law. For example, New Jersey’s SB 679 is nearly identical to SB 253 but would not require disclosure of Scope 3 emissions. The bill passed out of the New Jersey Senate Environment and Energy Committee with amendments in February but there has been no further legislative action as of June 2026. Similarly, New York Senate Bill 9072A was passed by the Senate on February 10 and remains pending in the Assembly. If passed into law, S9072A would require disclosure of Scope 1 and Scope 2 emissions by approximately 2028 and disclosure of Scope 3 emissions by approximately 2029, matching California’s SB 253.
New York is also considering a climate-related risk disclosure bill—Senate Bill 3697A, similar to California’s SB 261—which would require companies with over $500 million in annual revenue to publish biennial reports on climate-related financial risks and mitigation strategies. The bill stalled in committee and failed to receive a vote at the end of the 2025 legislative session and has not progressed in the current legislative session.
Until other states enact similar laws, California stands as the de facto national standard-setter for corporate climate disclosure in the United States.
SEC Developments: Confirmed Focus on California
At the federal level, on May 29, the SEC proposed rescinding its 2024 climate disclosure rules, which were stayed in litigation shortly after adoption and never took effect. If finalized, the rescission would formally eliminate federal disclosure obligations and further shift the center of regulatory activity to the states.
Companies doing business in California should focus squarely on near-term developments at CARB. In particular, companies should monitor forthcoming agency guidance on Scope 1 and Scope 2 reporting expectations for the August 10 deadline, as well as the anticipated rulemaking that will define Scope 3 reporting and assurance requirements for 2027 and beyond.
