Turn Compliance into a Competitive Advantage

California’s SB 253 will require entities doing business in California with revenue greater than $1 billion to disclose their Scope 1, 2, and eventually Scope 3 greenhouse gas (GHG) emissions. Disclosures for Scope 1-2 emissions will begin in 2026 for FY2025 data, with Scope 3 disclosures beginning in 2027 on FY2026 data.

Entities subject to SB 253 will also need to obtain limited assurance over their Scope 1-2 emissions, starting with the first set of disclosures in 2026. Entities are not required to obtain limited assurance over their Scope 3 GHG emission until 2030.

We recommend starting the GHG inventory for the prior year as soon as the year concludes. This way you can be ready to submit your inventory to CARB in Q3. 

California’s SB 261 Climate-related Financial Risk Act requires entities doing business in California with revenues greater than $500 million to provide biannual climate-related financial risk reports and publicly disclose this report on their website. The reports must be produced in alignment with the recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD), which have been incorporated into the IFRS ISSB S2.

Companies must include the four overriding principles informed by TCFD: governance, strategy, risk management, and metrics & targets

Reports must contain a statement on which reporting framework was applied and which recommendations and disclosures have been compiled and which have not

Companies must provide a short explanation if certain recommendations/disclosures were not included and plans to include in the future.

Companies need to analyze their physical and transition risks (in accordance to TCFD guidelines) for their climate-related risk assessment.

AB 1305 enacts additional disclosure requirements for all entities operating within the state of California that buy or use voluntary carbon offsets and make climate-related claims (e.g., net zero emissions, carbon neutral, or emissions reductions).