The California Air Resources Board (CARB) has released draft regulatory text for the state’s landmark climate disclosure laws — Senate Bills 253 and 261 — ahead of a planned vote on final adoption in late February 2026. The move comes after several delays and ongoing legal challenges from business groups.
Under the proposed rules, companies covered by SB 253, which requires entities generating more than US$1 billion in annual revenue to report their greenhouse gas emissions, must submit Scope 1 and Scope 2 emissions by 10 August 2026. CARB had initially expected to publish the regulations in October but pushed the timeline back to early 2026.
A preliminary injunction has paused enforcement of SB 261, which mandates climate-related financial risk reporting for entities earning over US$500 million. Following the ruling, CARB has confirmed it will not take enforcement action against companies that miss the statutory 1 January 2026 deadline. It has also opened a voluntary reporting docket for firms wishing to submit disclosures under the law.
Governor Gavin Newsom signed both bills — the Climate Corporate Data Accountability Act (SB 253) and the Climate-related Financial Risk Act (SB 261) — in 2023. Amendments passed in 2024 granted CARB additional time to develop the regulations, although the agency missed the July 2025 deadline to propose SB 253.
The draft regulation, posted on CARB’s climate disclosure webpage, was submitted to the state’s Office of Administrative Law and is expected to be published for public comment on 26 December, launching a 45-day consultation period ending 9 February 2026. A public hearing to consider final approval is scheduled for 26 February, with the option to continue discussions on 27 February.
CARB noted that it was providing extended review time due to the “holiday season and the strong interest in this programme”.
The proposed rules define revenue using gross receipts, or sales, consistent with California’s tax code. CARB argues that this approach better identifies companies with large operational footprints. Eligibility will be assessed using the lower revenue figure from the previous two fiscal years, helping account for entities with volatile earnings.
Certain organisations will be exempt, including nonprofits, tax-exempt charities, government agencies, insurance companies, and businesses whose only activity in California is related to wholesale electricity purchases or payments to teleworking employees.
The regulations face continued legal pushback. The U.S. Chamber of Commerce and other business groups argue the laws violate First Amendment rights. While earlier attempts to block the measures failed, the Ninth Circuit Court of Appeals temporarily halted enforcement of SB 261 in November. ExxonMobil also filed a lawsuit in October.
Despite litigation, CARB last year indicated it would not enforce penalties for incomplete disclosures and urged companies to make a “good faith effort” to comply. The agency also published a preliminary list of thousands of entities expected to fall under the scope of the two laws.
