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

• Thousands of companies are expected to fall under California’s Climate Accountability Package (“the 200s”), based on finalized definitions for “revenue” and “doing business in California”. 
• SB 261 remains enjoined and no enforcement action will be taken until the Ninth Circuit court reaches a resolution 
• First year compliance deadlines for SB 253 are approaching fast – with first disclosures due on August 10, 2026  
• CARB’s Board has unanimously passed the initial regulations, focused on 2026 regulations, with one minor amendment specifically clarifying CARB’s commitment to working with the California Department of Insurance (CDI) within the regulation. 
• CARB is now in the pre-rulemaking phase for SB 253 reporting in 2027 and beyond 

Find the latest rulemaking package for 2026 reporting, here. 

Timeline Update

• CARB is currently in the pre-rulemaking phase for SB 253 reporting for 2027 and beyond. 
• Staff presented the Initial Proposed draft regulation to the Board, on February 26, 2026. Moving forward, CARB will prepare written responses to public comments shared during the Board Hearing and submit the final rulemaking package, including additional language clarifying coordination with the California Department of Insurance, to the Office of Administrative Law for review. Staff will also undergo a public process for a second rulemaking in 2026, to address program requirements in 2027 and beyond. 
• 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 by the court. Oral arguments were on January 9^th, however, no resolution has been reached as of March 2^nd, 2026 and the court has not indicated an expected timeline. CARB has confirmed through their most recent Enforcement Advisory that it will not enforce the January 1, 2026 statutory deadline for SB 261 given the injunction and will provide further information – including an alternate date for reporting, as appropriate – after the appeal is resolved. 

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. Please note: the injunction is only relevant for SB 261, and the August 10^th deadline for first-year SB 253 disclosures remains in effect. 

General Updates on Definitions & Coverage 

CARB has finalized the key definitions for “revenue”, “doing business in California”, and “corporate relationships” which align with the versions shared in their November workshop.

Revenue:  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.​ 
• Note: Insurance entities are excluded in statute for SB 261, CARB’s regulatory package proposed extending this exclusion to SB 253. The only minor amendment proposed during the Board hearing was to clarify within the regulation that CARB is committed to working with the California Department of Insurance (CDI) to share relevant data. 

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: CARB has confirmed through their most recent Enforcement Advisory that it will not enforce the January 1, 2026 statutory deadline and will provide further information – including an alternate date for reporting, as appropriate – after the appeal is resolved. CARB opened its SB261 public docket on December 1, 2025. The public docket will be available through July 1, 2026. 

At this time, submission remains voluntary pending the court’s final ruling and CARB’s potential issuance of a new deadline. Upon submission, CARB asks companies to include a statement on company letterhead listing relevant subsidiaries (for consolidated reports) along with a publicly accessible link to the report on their website.  Despite the temporary pause on SB 261 enforcement, over 100 different organizations spanning industries have already voluntarily submitted their reports, which you can view here. 

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 

2026 Reporting Deadline: CARB has confirmed 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 emissions disclosure in 2027 and beyond. CARB is expected to provide more clarity on an annual deadline as rulemaking progresses.

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 for 2026 submissions.

• 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. An updated version of this template is expected to be released in summer 2026. 

Note: CARB indicated that additional reporting guidance for 2026 is expected to be released in the coming weeks 

Third-Party Assurance Requirements: 

CARB confirmed that they will notmaintain a list of approved verifiers. Instead, companies must use providers that follow accepted assurancestandards. CARB remains open to feedback, but suggested standards as of March 2026 include:   

• AA1000 Assurance Standard (AA1000AS v3)  
• AICPA (AT-C Section 210 (review engagement: limited) or AT-C 205 (examination engagement: reasonable) 
• ISAE 3000 (Revised) and ISAE 3410 (until December 2026) 
• ISSA 5000 (effective December 2026) 
• ISO 14064-3:2019 (ISO 14065 / ISO 14066 – provider qualifications) 

Enforcement Notice 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. Additionally, CARB has confirmed that for 2026 reporting, limited assurance is not required for data submission unless it is already being performed. This does not change the requirements for 2027 onward. 

Emission disclosure updates for disclosure in 2027 and beyond (as of March 23rd, 2026)

On March 23, 2026, CARB held a virtual public workshop to kick off their second round of rulemaking focused on SB 253 reporting requirements for 2027 and beyond.  

The workshop was part of CARB’s pre-rulemaking process where they presented initial concepts across key areas and are requesting public feedback by April 13th. The emission disclosure concepts are summarized below:

1. Organizational Boundaries:  
Following the GHG Protocol, CARB proposed flexibility on which organizational boundary approach companies can use:  

• Equity Share Approach 

• Operational Control Approach 

• Financial Control Approach 

2. GHG Accounting Methodology: CARB proposed flexibility on which GHG accounting methodologies companies can use, following best practice examples indicated in the Greenhouse Gas Protocol, including:  

• Spend-based, 

• Activity-based, 

• Supplier-specific (which notably CARB indicated would not be required), and 

• Hybrid approaches 

3. Emission Factors: CARB remains flexible on which emission factors companies can use in their GHG inventories and shared examples of potentially acceptable emission factors, including those from EPA and IPCC, among others. 

4. Scope 3 Reporting Options: CARB proposed three distinct approaches to phase in Scope 3 disclosures:  

• Option 1: Broad Applicability – All companies report on all categories starting in 2027, but have the flexibility to not report certain categories that are deemed “de minimis”, with appropriate explanation. 

• Option 2: Sectoral Phase-In – The highest emitting sectors (e.g., transportation, technology and energy, cement production, and other manufacturing activities) would begin reporting in 2027 and additional sectors would phase in over time 

• Option 3: Category Phase-In – All companies would report on a limited set of “most reported” scope 3 categories (1, 3, 5, 6, and 7) in 2027, with additional categories phasing in over time. Companies may still voluntarily report of the other categories. 

CARB is soliciting public feedback through this form by April 13th, 2026.  

Fee Regulation: What to Expect 

CARB ‘s fee concept, which was confirmed at the February 26^th Board Hearing, is a flat annual fee for each in scope entity per regulation in line with what was shared in the November workshop. CARB is expected to issue invoices based on the number of entities required to report, beginning in fiscal year 2026 and for each year thereafter, on or by September 10^th. Companies would need to pay within 60 days of the fee determination notice date or may be subject to a late fee and/or payment violation. 

Based on CARB’s August 2025 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: Join the California Climate Disclosures Hub (SB 253 | SB 261) LinkedIn Group where the latest updates are posted.
✅ Assess your Status: Review the finalized 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 or sign up for a free 30-minute discovery call.
✅ Get started: Begin organizing your emissions data and climate risk assessments – early preparation reduces last-minute risk. 

Dates to Know

• December 1, 2025: CARB opened the public docket for submission of SB 261 reports and it should remain open until July 1, 2026. 
• January 1, 2026: The statutory deadline for SB 261 reporting on companies’ websites. This is currently paused, but an update from the Ninth Circuit Court and subsequent alternate date for reporting, if appropriate, is expected in 2026.
• February 26, 2026: The CARB Board unanimously passed initial rulemaking. CARB will prepare written responses to public comments from the hearing and submit the final rulemaking package, including additional language clarifying coordination with the California Department of Insurance, to the Office of Administrative Law for review. 
• April 13, 2026: Deadline to submit public feedback to CARB on their initial staff concepts shared in their March 2026 public workshop. This is the beginning of CARB’s public process for a second rulemaking effort to address program requirements in 2027 and beyond.
• August 10, 2026: Year 1 SSB 253 reporting deadline for Scope 1 & 2 emissions disclosures for relevant entities.

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.