On October 12, 2026, the California Office of Administrative Law approved CARB’s Initial Regulation implementing SB 253 and SB 261, and the regulation took effect the same day. It is codified at Title 17, California Code of Regulations, sections 96070 to 96077. The approval locks in the date every covered company now works to: November 10, 2026, when the first Scope 1 and Scope 2 emissions reports under SB 253 are due. The two laws travel together but sit in very different legal positions — one is active and enforceable, the other is paused by a federal court — and a workable compliance plan has to hold both facts at once.
The two laws at a glance
| Parameter | SB 253 — Climate Corporate Data Accountability Act | SB 261 — Climate-Related Financial Risk Act |
|---|---|---|
| Primary focus | Scope 1, 2 and (from 2027) Scope 3 GHG emissions | Climate-related financial risk, aligned to TCFD / IFRS S2 |
| Revenue threshold | More than $1 billion in total annual revenue | More than $500 million in total annual revenue |
| California nexus | Doing business in California | Doing business in California |
| Status | Active — first filing due November 10, 2026 | Enjoined — enforcement stayed by the Ninth Circuit |
| First-year scope | Scope 1 and Scope 2 emissions only | Risk governance, strategy, risk management, metrics |
| Assurance, 2026 cycle | None required | None |
| Notable exemption | Certain tax-exempt nonprofits | Insurance companies (they report climate risk under insurance regulation instead) |
| Maximum civil penalty | $500,000 per reporting year | $50,000 per reporting year |
The statutory homes are Health and Safety Code section 38532 (SB 253) and section 38533 (SB 261). Everything in the Initial Regulation — the definitions, the fee, the first-year relief — hangs off those two sections, and the regulation is explicitly the initial one: CARB has already previewed the 2027 rulemaking that adds Scope 3 and assurance.
Who is in scope
Applicability is tested at the individual legal-entity level, not across the corporate family. A parent does not become a reporting entity merely because a subsidiary crosses the threshold, and intercompany transactions are excluded from the revenue count. A parent may still file one consolidated report — and pay one consolidated fee — on behalf of subsidiaries that qualify on their own.
The revenue test uses “gross receipts” as defined in Revenue and Taxation Code section 25120(f)(2), counted globally, not just in California. To smooth out a single unusual year, the regulation measures revenue at the lesser of the entity’s two previous fiscal years. An entity that dipped below the line in one of the two years is measured on the lower figure.
The “doing business in California” test is the sales test from Revenue and Taxation Code section 23101, applied on sales alone. An entity is doing business in California if it is organized or commercially domiciled there, or if its California sales exceed the inflation-adjusted threshold — $757,070 for 2025 sales — or 25% of its total sales. The property and payroll prongs of the general tax test do not apply here. Two exemptions round out the picture: certain tax-exempt nonprofits are exempt from the program, and insurance companies are exempt from SB 261 only — an insurer over the $1 billion line still reports emissions under SB 253.
Which fiscal year you report
The Initial Regulation maps your fiscal year-end to the dataset the November 10 filing must carry. If your fiscal year ends between January 1 and February 1, 2026, you report fiscal 2026 data. If it ends between February 2 and December 31, 2026, you report fiscal 2025 data — for most companies, the year that closed in calendar 2025. Entities in the second group have one election worth knowing about: you may instead report your most recent fiscal year if that data is readier. The point of the mapping is that nobody is asked to close a fiscal year early to meet the deadline; the filing runs on a year that has already ended.
What the first filing contains
First-year SB 253 filings cover Scope 1 and Scope 2 only, built on the GHG Protocol Corporate Accounting and Reporting Standard. Scope 1 is the direct inventory: stationary combustion in boilers and furnaces, mobile combustion in company fleets, process emissions, and fugitive losses such as refrigerants. Scope 2 is purchased energy — electricity, steam, heating and cooling — and CARB’s guidance expects both location-based and market-based figures where the data supports them. Each filer picks one organizational boundary — operational control, financial control, or equity share — documents it, and applies it consistently. Scope 3 is expressly out of the 2026 cycle; it arrives with the 2027 rulemaking covered below.
The third door: the statement of non-reporting
CARB wrote first-year relief directly into the regulation, at section 96076(b)(1). The relief exists because of a fixed historical fact: CARB’s enforcement notice of December 5, 2024. An entity that, as of that date, was neither collecting nor in possession of Scope 1 and Scope 2 data — and was not already running a data-collection plan — does not have to invent an inventory for 2026. It files a statement instead. (Our companion piece, Three Doors Into November 10, walks the filing choice itself: data you had, data from another program, or the statement.)
| A valid statement of non-reporting must… |
|---|
| Be rendered on formal company letterhead |
| Be signed by an authorized officer or legal representative |
| State explicitly that, as of December 5, 2024, the entity was neither possessing nor collecting Scope 1 and Scope 2 emissions data |
| Speak only to that date — filing it covers the 2026 cycle, not later ones |
Two cautions belong next to the relief. Statements may be placed on CARB’s public docket, so write yours expecting it to be read. And the relief is fact-bound: an entity that was tracking emissions on or before December 5, 2024 cannot use it, and a statement filed anyway does not become valid by being filed. What the statement buys is time — the 2027 cycle expects a real inventory, with assurance behind it.
How to file
CARB’s preferred route is its voluntary 2026 Report Intake Platform, and email is the accepted alternative. On the platform you designate a reporting contact, choose the submission type — full Scope 1 and 2 report or statement of non-reporting — and upload the report with its boundary and methodology documentation. Reports and contact information may instead be emailed to [email protected]. Either route satisfies the obligation; whichever you use, keep the system’s confirmation or your sent-mail record. In a program this new, your own filing receipt is the document everything else gets checked against.
SB 261: paused, not repealed
SB 261’s reporting duty is stayed, and the reason is a First Amendment case your board should know by name. On November 18, 2025, the Ninth Circuit enjoined enforcement of SB 261 in Chamber of Commerce v. Sanchez, No. 25-5327, while declining to touch SB 253. The court heard oral argument on January 9, 2026; as of this writing no merits decision has issued, and CARB has stated it will not enforce the law while the injunction stands. When — if — the stay lifts, the duty is a biennial climate-related financial risk report, published on the company’s website, built on the four TCFD pillars: governance, strategy, risk management, and metrics and targets, with quantitative scenario analysis optional in the first cycle. CARB has opened a public docket for companies that choose to file voluntarily in the meantime. The sensible posture for a covered entity is background readiness: draft against the four pillars now — our compliance frameworks map shows how TCFD, IFRS S2 and the California statutes line up — but file nothing under SB 261 until the court rules. Nothing about the injunction slows SB 253 by a single day.
Fees, penalties, and what happens after November 10
The program is fee-funded, and the first fee notices land a month after the first reports. CARB charges a flat annual fee per program — the program’s annual cost divided across covered entities, calculated under sections 96073 to 96075 — and will issue fee determination notices beginning December 10, 2026. Payment is due within 60 days of the notice, a parent may pay once for consolidating subsidiaries, and the fee is owed whether the entity filed data or a statement of non-reporting. Penalties sit behind the deadlines: up to $500,000 per reporting year under SB 253, and up to $50,000 under SB 261 once it is enforceable, with failure to file treated as the enforcement priority. CARB has also said, consistently since its December 2024 notice, that good-faith first-year filings made with the data an entity actually had will be met with discretion rather than penalties — which is a reason to file something honest by November 10, not a reason to file nothing.
The horizon: Scope 3 and assurance
| When | What changes |
|---|---|
| November 10, 2026 | First SB 253 reports: Scope 1 and 2, no assurance required |
| December 10, 2026 | First CARB fee determination notices; payment due within 60 days |
| 2027 cycle | Scope 3 reporting begins (five categories proposed); limited assurance phase-in for Scope 1 and 2 |
| 2030 onward | Reasonable assurance required for Scope 1 and 2 |
Scope 3 starts narrow, on CARB’s July 21, 2026 workshop proposal: five categories first. They are Category 1 (purchased goods and services), Category 3 (fuel- and energy-related activities), Category 5 (waste generated in operations), Category 6 (business travel) and Category 7 (employee commuting) — the five with the most established data and methods — with the other ten categories voluntary for now. Treat the list as a proposal, not a rule: CARB expects to release draft regulatory text in late 2026 with a 45-day comment period. Assurance climbs on its own staircase alongside: no assurance for the 2026 cycle, limited assurance over Scope 1 and 2 in the 2027–2029 window, and reasonable assurance — financial-audit rigor — from 2030. A data system built for November should be built so both staircases can be climbed without rebuilding it.
Frequently asked questions
When are the first SB 253 reports due, and what has to be in them?
November 10, 2026. The filing covers Scope 1 and Scope 2 emissions for the fiscal year the regulation assigns you — fiscal 2025 for most companies — prepared under the GHG Protocol. No third-party assurance is required for this cycle, and Scope 3 is not part of it.
Our company wasn’t tracking emissions in 2024. Do we still have to file?
Yes — but what you file is a statement of non-reporting on company letterhead, signed by an authorized officer, stating that as of December 5, 2024 you were neither possessing nor collecting Scope 1 and 2 data. That statement is the compliant 2026 filing for an entity in your position. It does not carry into 2027.
Is SB 261 in force right now?
No. The Ninth Circuit enjoined its enforcement in November 2025 in Chamber of Commerce v. Sanchez, and CARB has said it will not enforce the law while the injunction stands. The obligation may return on a court ruling, so covered companies are preparing TCFD-aligned reports without filing them.
What’s the most we can be fined?
$500,000 per reporting year under SB 253, and $50,000 per reporting year under SB 261 (once enforceable). CARB has signaled enforcement discretion for good-faith first-year filings; non-filing is what it has said it will pursue first.
Does the EU’s CSRD change what we owe California?
No — they are separate regimes with separate filings, though a company reporting under both will reuse much of the same inventory. Our EU CSRD and ESRS roadmap covers the European side.
We have to pay CARB even if we filed the non-reporting statement?
Yes. The annual fee funds the program and is assessed per covered entity regardless of which filing route you took. First notices issue December 10, 2026, payable within 60 days.
Sources: California Air Resources Board, California Climate Disclosure Program — Initial Regulation, Title 17 CCR §§ 96070–96077 (approved by the Office of Administrative Law, October 12, 2026); Health and Safety Code §§ 38532–38533; Revenue and Taxation Code §§ 23101, 25120(f)(2); Chamber of Commerce v. Sanchez, No. 25-5327 (9th Cir.); CARB public workshop on 2027 reporting, July 21, 2026. Law-firm analyses consulted: WilmerHale, “Climate Disclosure Update: CARB’s SB 253 Initial Regulation Takes Effect” (Oct 20, 2026); Greenberg Traurig, “California SB 253: CARB Sets Nov. 10, 2026, Deadline” (Oct 2026). This article is general information about a new regulation, not legal advice for a specific company.