California’s Office of Administrative Law approved the California Air Resources Board’s corporate climate disclosure regulation on October 12, 2026, and the rule took effect the same day. It sets fees, defines which companies are covered, and fixes November 10, 2026, as the first deadline for large companies doing business in California to report their Scope 1 and Scope 2 greenhouse gas emissions.
Key Takeaways
- The regulation implements SB 253, which covers U.S.-based entities with more than $1 billion in annual revenue that do business in California.
- It also implements SB 261, which requires biennial climate-related financial risk reports from U.S.-based entities with more than $500 million in annual revenue that do business in California.
- CARB moved the first SB 253 reporting deadline from August 10 to November 10, 2026, after withdrawing and revising the rule in June.
- Reporting under SB 253 expands to include Scope 3 emissions, those generated across a company’s supply chain, beginning in 2027.
- Fees are calculated by dividing CARB’s annual program costs by the number of entities covered, with earlier staff estimates of $3,106 for SB 253 and $1,403 for SB 261.
- A federal appeals court halted enforcement of SB 261 in late 2025 while litigation continues, but left SB 253 in place.
A Rule Eight Months in the Making
The regulation’s path to approval shows how carefully the California Air Resources Board has had to move. The board unanimously adopted the rule on February 26, 2026, setting August 10 as the first reporting deadline. CARB submitted the package to the Office of Administrative Law on May 20. On June 24, it withdrew the package to push the first SB 253 deadline back three months to November 10, then reopened the rule for a 15-day public comment period before resubmitting it.
The approved text is now codified in Title 17 of the California Code of Regulations, at sections 96070 through 96077. Both laws were also amended by SB 219, which adjusted the original 2023 statutes.
What the Regulation Actually Does
The California Air Resources Board describes this as an initial regulation, and its scope is narrow. It does not yet set detailed reporting standards. It does three things that determine how the program operates.
It Sets the First Emissions Deadline
Companies covered by SB 253 must report their Scope 1 emissions, which come directly from their own operations, and Scope 2 emissions, which come from purchased energy, by November 10, 2026. Scope 3 reporting is scheduled to begin in 2027.
It Defines Who Is Covered
The regulation clarifies what “doing business in California” means, and it lists six indicators of control used to determine how parent companies and subsidiaries are treated. It also excludes several categories, including nonprofits, government entities, companies whose only presence in California is employees working remotely, and entities whose only California activity is wholesale electricity transactions in interstate commerce.
It Funds the Program Through Fees
Covered entities pay annual fees into two new state funds, the Climate Accountability and Emissions Disclosure Fund for SB 253 and the Climate-Related Financial Risk Disclosure Fund for SB 261. Fees are set by dividing CARB’s estimated annual cost of running each program by the number of covered entities. Companies subject to SB 261 pay the fee every year, even though their climate-risk reports are due only every other year.
The Legal Fight Is Still Unresolved
Both laws have faced legal challenges from business groups since they were signed. In late 2025, the U.S. Court of Appeals for the Ninth Circuit paused enforcement of SB 261 while an appeal moves forward. As a result, CARB said it would not enforce SB 261’s original January 1, 2026 reporting deadline. The court did not block SB 253, which is why the emissions reporting deadline is moving ahead while the climate-risk reports remain on hold.
CARB can continue building the regulatory framework for both laws while the case proceeds. The outcome of the appeal will decide whether SB 261’s climate-risk reports become enforceable on the schedule the state originally intended.
California Fills a Gap Left by Federal Regulators
The approval matters well beyond the state’s borders. The U.S. Securities and Exchange Commission voted in 2025 to end its defense of its own climate disclosure rule, leaving no comparable federal requirement in place. California’s laws apply based on revenue and doing business in the state, not on where a company is headquartered. That gives Sacramento a role in setting climate reporting expectations for many of the country’s large companies, including those based elsewhere.
California has also been tracking its own emissions closely. Recent state data shows California’s greenhouse gas emissions falling 3.9% while the state economy grew 3.2%, a figure state officials point to as evidence that emissions cuts and economic growth can happen together. Corporate disclosure extends that measurement from state-level inventories to individual companies.
What Comes Next
The November 10 deadline is now less than a month away. CARB is expected to continue developing more detailed rules covering Scope 3 reporting, third-party verification of reported data, and future reporting cycles. Companies seeking guidance on whether and how the rules apply to them typically consult CARB’s published materials and their own legal and sustainability advisers.
FAQs
When did California’s climate disclosure regulation take effect?
The California Corporate Greenhouse Gas Reporting and Climate-Related Financial Risk Disclosure Initial Regulation took effect October 12, 2026, the same day the Office of Administrative Law approved it.
Which companies must report emissions under SB 253?
SB 253 applies to U.S.-based entities with more than $1 billion in annual revenue that do business in California. The first Scope 1 and Scope 2 reports are due November 10, 2026.
What is the difference between SB 253 and SB 261?
SB 253 requires annual greenhouse gas emissions reporting from companies with more than $1 billion in revenue. SB 261 requires biennial climate-related financial risk reports from companies with more than $500 million in revenue.
Is SB 261 being enforced?
Enforcement of SB 261 was paused by the Ninth Circuit in late 2025 while an appeal proceeds. SB 253 was not blocked.
How much are the CARB climate disclosure fees?
Fees are calculated by dividing CARB’s annual program costs by the number of covered entities. Earlier CARB staff estimates put them at $3,106 for SB 253 and $1,403 for SB 261.
