The California Air Resources Board (CARB) has formally approved a landmark regulation to implement the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act.
This decision establishes the necessary fee structures and administrative frameworks to facilitate mandatory greenhouse gas reporting and financial risk disclosures for large-scale businesses operating within the state.
By adopting these measures, California aligns itself with global standards for corporate transparency, aiming to provide consumers and investors with reliable data regarding the environmental impact and climate resilience of major commercial entities.
Under the new rules, companies with annual revenues exceeding $1 billion that conduct business in California must meet their first reporting deadline on 10 August 2026. This initial phase requires the disclosure of Scope 1 and Scope 2 emissions, covering both direct greenhouse gas outputs and indirect emissions from purchased energy.
To streamline the process, revenue thresholds will be verified against gross receipts reported to the California Franchise Tax Board. While the board has noted that over 120 organisations have already begun submitting voluntary reports, the new regulation ensures a consistent and funded programme for long-term oversight.
CARB Chair Lauren Sanchez emphasised that providing clear disclosure requirements is essential for informing the decisions of the public and financial sectors alike. The regulation targets a flat-rate fee model to cover programme costs and applies to both public and private entities across various sectors, including technology, healthcare, and finance.
While certain non-profits and government-owned entities remain exempt, the board has indicated it will prioritise stakeholder support and exercise enforcement discretion for good-faith submissions during the first year of the mandate.
