The California Air Resources Board (CARB) hosted a workshop on May 29, 2025 to outline its approach to implementing California’s pending climate disclosure requirements, with attendees from five continents demonstrating the global interest in California’s approach.
What’s Being Required and When
SB 253: Companies doing business in California with annual revenues exceeding $1 billion will need to disclose their greenhouse gas emissions, with scope 1 and 2 reporting beginning in 2026 (for 2025 emissions) and scope 3 reporting following in 2027 (for 2026 emissions).
SB 261: Companies with revenues over $500 million must begin disclosing climate-related financial risks by January 1, 2026.
Key Implementation Questions Under Consideration
CARB is currently working through several foundational questions that will determine which businesses must comply:
- How should “doing business in California” be defined? CARB is considering using definitions from California’s Revenue and Tax Code with potential modifications.
- What constitutes “revenue” for threshold purposes?
- How will parent/subsidiary relationships be handled for reporting responsibilities?
- How closely will California’s requirements align with existing frameworks like the GHG Protocol, TCFD, and ISSB standards?
- How can California design a set of regulations that will minimize the reporting burden for companies while creating a reporting structure that allows for easy comparison across sectors?
Stakeholder Concerns and Considerations
During the workshop, businesses and other stakeholders raised several important considerations:
- Many companies already report emissions voluntarily and are seeking alignment with those existing frameworks.
- Concerns exist about compliance burdens for companies with minimal California presence.
- Clear timelines and guidance are needed to prepare for compliance.
Updated Regulatory Timeline with No Announced Change in Implementation Dates
CARB announced its plans to develop final regulations by the end of 2025, with additional workshops and opportunities for stakeholder input in the coming months. This deviates from the legislative timeline, which gave CARB a July 1, 2025 deadline for the final regulations to be issued. However, no plans to amend the implementation timeline were discussed.
For companies already preparing, CARB has emphasized that initial compliance will focus on good faith efforts, particularly for the first reporting year. Companies potentially affected by these requirements are encouraged to engage in the process, particularly regarding the threshold definitions that will determine coverage.
About Full Scope Insights
Full Scope Insights specializes in developing and executing value-add sustainability strategies for public and private organizations in a cost-efficient manner, including California regulatory compliance. FSI provides scope 1, scope 2 and scope 3 GHG emissions accounting required by California’s SB 253 as well as various types of reporting, including California’s SB 261 climate risk reporting.
For more information on Full Scope Insights, contact us today.