Breaking Down the Latest CARB Updates on California Climate Disclosure Laws (the 200s) 

• Thousands of companies will fall under California’s Climate Accountability Package (“the 200s”), with updates now around definitions, timelines, and fees.
• SB 261 and SB 253 compliance deadlines are approaching fast – with first reports due in 2026.
• CARB shared first year reporting expectations and clarified scoping definitions.

The California Air Resources Board (CARB) recently shared new details on implementation guidance and the initial regulation expected in Q1 2026 to clarify expectations from companies that will be in scope during their most recent workshop in November. Find the CARB webinar materials here and a summary of the latest updates for your review below.

Timeline Update

Staff plans to present the Initial Proposed draft regulation to the Board in Q1 2026, with a precise date not yet confirmed. Draft rules will be released prior to the Board hearing for a public comment period of 45 days. Staff will also undergo a public process for a second rulemaking in 2026, to address program requirements in 2027 and beyond. 

Note that this delay in Board consideration of the initial rulemaking from December 2025 to Q1 2026 will not delay implementation of the fee provisions or reporting deadlines. 

On November 18^th, the U.S. Court of Appeals for the Ninth Circuit issued a temporary injunction on SB 261. This means that the SB 261 deadline of January 1^st is paused until decisions are made; which may occur before, during, or after the January 9^th oral arguments. We recommend reviewing the CARB materials linked throughout and consulting your legal counsel regarding any additional implications. Despite these updates we believe proceeding as planned remains the best path forward to being well prepared for compliance as the deadline would be effective immediately upon the Ninth Circuit’s decision. 

General Updates on Definitions & Coverage 

Gross receipts: CARB is maintaining the original definition proposed in May 2025 of revenue as “gross receipts” as set forth in California Revenue and Taxation Code § 25120(f)(2). This is as follows:  

“The gross amounts realized (the sum of money and the fair market value of other property or services received) on the sale or exchange of property, the performance of services, or the use of property or capital (including rents, royalties, interest, and dividends) in a transaction that produces business income, in which the income, gain, or loss is recognized (or would be recognized if the transaction were in the United States) under the Internal Revenue Code, as applicable for purposes of this part. Amounts realized on the sale or exchange of property shall not be reduced by the cost of goods sold or the basis of property sold.” 

Additionally, it has been clarified that entities should consider revenue from the previous two fiscal years and use the lower of the two values to determine if they fall in scope. 

Doing Business in CA: CARB updated their proposed definition of doing business in California to remove thresholds for payroll and property holdings that were included in previous versions of the definition.  

Proposed conditions for doing business in California are:​ 

Actively engaging in any transaction for the purpose of financial or pecuniary gain or profit (Cal. Revenue & Taxation Code § 23101(a)); 

AND​, either The entity is organized or commercially domiciled in the state of California​ 

OR California sales exceed $735,019​ (including by an agent or independent contractor) or 25% of the taxpayer’s total sales in 2024 

Corporate Relationships: CARB’s proposed definition of parents and subsidiaries aligns with the Cap-and-Invest program, which considers a company a subsidiary when another entity has ownership or control through a direct corporate association, as defined in Title 17, CCR §95833. 

For additional details on common examples and questions regarding parent-subsidiary relationships, please reference CARB’s latest FAQs document. 

Exclusions and Proposed Exemptions: CARB has acknowledged the need for certain exemptions and exclusions and has proposed the following:  

• Exemption of non-profits or charitable organizations that are tax-exempt under the Internal Revenue Code, entities whose only business in CA is the presence of teleworking employees​ or consists of wholesale electricity transactions 

• Exclusions for government entities, as well as companies that are majority-owned by government entities, and entities that are in the business of insurance in any state.​ 

Company List: On September 24^th, CARB published a preliminary list of potentially in-scope companies leveraging data published by the California Secretary of State Business Entity database; yet, companies remain responsible for their own compliance assessment. In the November 18^th workshop, CARB noted that it is refining its methodology for determining covered entities and hoping to leverage State Franchise Tax Board data rather than CA Secretary of State data to improve accuracy for fee regulation. 

SB 261: Climate Risk Disclosure Updates 

Public Disclosure Timeline: The January 1, 2026 public disclosure deadline stands, and CARB intends to have the docket open from December 1, 2025 until July 1, 2026 to allow some grace in companies uploading links to their public reports. 

Minimum Content Requirements: CARB published an updated Climate Related Financial Risk Report Checklist on November 17^th that serves as the minimum requirements document for Year 1 reporting.

All reports are required to:  

• Disclose which standard is being applied (i.e., TCFD, ISSB, or an alternate regulatory disclosure – such as CSRD)​ 
• Discuss which recommendations and disclosures were followed and which were not ​ 
• Provide a short summary of the reasons why specific recommendations or disclosures have not been included, as well as plans for future disclosures 

First year reports do NOT need to include:  

• Scenario Analysis is expected to be included if the analysis is available ​ 
• GHG emissions are expected to be included if available
• Analysis based on FY25 data: FY23 and FY24 data is permitted, if that is the latest and best available information the company has access to

SB 253: Emissions Reporting Updates 

Proposed First Deadline: CARB has proposed August 10, 2026 as the Year 1 reporting deadline for Scope 1 and Scope 2 emissions. Notably, there is still no specific date clarified for Scope 3 emissions disclosures expected to be required as of 2027.  

Important Update! CARB indicated that entities that were not collecting data or planning to collect data at the time their December 2024 Enforcement Notice was issued, are not expected to submit Scope 1 and Scope 2 reporting data in 2026. Rather, entities should submit a statement on company letterhead to CARB, stating that they did not submit a report, and indicating that in accordance with the Enforcement Notice, the company was not collecting data or planning to collect data at the time the Notice was issued. 

Fiscal Year Clarifications: To allow companies to have sufficient time to properly prepare emissions disclosures, CARB clarified Fiscal year expectations to ensure each entity at least 6 months to compile data. 

• If the reporting entity’s fiscal year ends on or before February 1, 2026, the preceding fiscal year will be the one ending in 2026.  

• If the fiscal year ends after February 1, then the preceding fiscal year will be the fiscal year ending in 2025.  

Voluntary Reporting Template: On October 10^th, CARB released a Draft Scope 1 and 2 Reporting Template and accompanying memo. CARB has indicated that this template is voluntary for use in 2026 and that companies may submit reports that they already develop to meet the first-year reporting requirements.  

The template is still being refined but is expected to request information on the company’s emission results, third party assurance provider, inventory boundaries, and methodology used in addition to emissions. 

Third-Party Assurance Requirements: 

CARB confirmed that they will not maintain a list of approved verifiers. Instead, companies must use providers that follow accepted assurance standards. Additional details are expected from CARB, but initial standard suggestions include:  

• SSA 5000 (IAASB)​ 
• AA1000
• ISO 14060 family
• AICPA

Important Update! CARB has confirmed that for 2026 reporting, limited assurance is not required for data submission. This does not change the requirements for 2027 onward. 

Fee Regulation: What to Expect 

CARB aims to present the final fee rulemaking to its Board in Q1 2026, and confirmed their fee concept to be a flat annual fee for each in scope entity. CARB is expected to issue invoices based on the number of entities required to report, likely in September 2026. 

Based on the August workshop, the estimated annual fees per entity would be: 

• ~$3,106 for SB 253 
• ~$1,403 for SB 261  

The intention is that each in-scope entity will pay an annual flat fee per law even for SB 261 (which only requires disclosures on a bi-annual basis). This means entities covered under both would face an estimated fee of ~$4,509, annually. The actual fees may vary each year as it is dependent on the cost of the program and number of in scope entities. 

CARB estimated these fees by applying the following formula:  

What Does This Mean for You?

Deadlines and requirements are coming fast, but there’s still time to prepare. Here’s how to stay ahead: 

✅ Stay in the know: We hosted a live Q&A with CARB on October 22^nd – watch the recording here!
✅ Assess your Status: Review the updated definitions to determine whether your company is in scope and validate with your legal team and/or counsel.
✅ Contact us for support: Our team can help you navigate requirements, design reporting strategies, and ensure compliance. Contact us at california@agendi.co.
✅ Get started: Begin organizing your emissions data and climate risk assessments – early preparation reduces last-minute risk. 

What’s Next?

• Public docket for SB 261 opens: On December 1^st 2025, CARB is expected to open the public docket for submission of SB 261 reports and should remain open until July 1, 2026 
• SB 261 Deadline: On January 1^st 2026 companies will need to publish reports for SB 261 (pending decision from the Ninth Circuit) 
• Oral Arguments: On January 9^th 2026, the Ninth Circuit holds oral arguments on the appeal for a longer injunction on the regulations  
• Notice on proposed rulemaking: Initial rulemaking will go to the board in 2026 at a Board meeting, date TBA 
• Year 1 SB 253 Deadline: On August 10^th 2026, Scope 1 & 2 emissions disclosure deadline for Year 1 reporting 

Stay Ahead of California Climate Rules 

These evolving requirements can feel complex, but early action reduces compliance risk. Need help preparing for SB 253 or SB 261? Get in touch with our team via california@agendi.co and book a 30-minute discovery call.