California has moved its corporate climate disclosure program from policy development to active implementation. On October 12, 2026, the California Office of Administrative Law (OAL) approved the California Air Resources Board’s (CARB’s) California Corporate Greenhouse Gas Reporting and Climate-Related Financial Risk Disclosure Initial Regulation (the “Initial Regulation). Effective immediately and codified at Title 17, California Code of Regulations, Article 6, sections 96070–96077, the Initial Regulation establishes the first enforceable framework for California’s corporate climate disclosure requirements.
For business leaders, the near-term priority is clear: entities subject to Senate Bill (SB) 253 must submit their first Scope 1 and Scope 2 greenhouse gas (GHG) emissions information by November 10, 2026. The Initial Regulation also advances implementation of SB 261, the Climate-Related Financial Risk Act, through common definitions, fee provisions, recordkeeping requirements, and administrative procedures. CARB’s corporate climate disclosure program page provides the agency’s current implementation resources.
What Business Leaders Need to Know
The Initial Regulation provides the administrative foundation companies need to evaluate exposure and prepare for compliance. It defines key terms relevant to annual revenue and “doing business in California,” establishes annual fee assessment and collection procedures, sets recordkeeping expectations, and confirms the first-year SB 253 reporting deadline. These provisions warrant coordinated attention from executive leadership, legal, finance, sustainability, enterprise risk, and internal audit functions.
SB 253 generally applies to U.S.-organized business entities with total annual revenues exceeding $1 billion that do business in California. It requires annual disclosure of Scope 1, Scope 2, and, in later reporting periods, Scope 3 GHG emissions for the prior fiscal year. SB 261 generally applies to U.S.-organized entities doing business in California with annual revenues exceeding $500 million and requires biennial public disclosure of climate-related financial risks and the measures adopted to reduce and adapt to those risks. Because the statutes have different thresholds and obligations, companies should complete a documented, entity-by-entity applicability assessment rather than assume that a consolidated corporate conclusion applies across the organization.
Immediate Priority: November 10, 2026
Reporting entities must submit their first Scope 1 and Scope 2 emissions information to CARB by November 10, 2026. CARB has made a 2026 SB 253 Voluntary Reporting Intake Platform available through its program webpage; companies may also submit emissions reports and contact information by email. Before filing, reporting teams should review CARB’s Guidance for SB 253 2026 Reporting Submittals and confirm that the submission approach, organizational boundary, reporting period, and supporting documentation are aligned.
CARB has indicated that it will exercise enforcement discretion for the 2026 reporting cycle consistent with its December 2024 enforcement notice. An entity may submit a Scope 1 and Scope 2 report for the applicable prior fiscal year or provide emissions information that could be determined from information in its possession or being collected as of December 5, 2024. CARB has also stated that limited assurance is not required for the initial 2026 submission. If an in-scope entity neither possessed nor was collecting Scope 1 or Scope 2 information as of December 5, 2024, CARB’s guidance contemplates a statement on company letterhead explaining why emissions data are not being submitted.
This first-year flexibility should be viewed as a transition mechanism—not a long-term exemption. Management should ensure that the company retains a clear record of its applicability analysis, reporting boundary, calculation approach, data sources, key judgments, and any reliance on CARB’s enforcement discretion. A defensible 2026 file will support both regulatory response and the more rigorous reporting and assurance environment expected in future years.
Plan Beyond the Initial Filing
The Initial Regulation also establishes an annual fee framework to recover CARB’s reasonable program administration costs. CARB is expected to begin issuing annual fee determination notices to reporting or covered entities on December 10, 2026, and annually thereafter. Payment will be due within 60 calendar days of the notice date. Companies should designate an accountable business owner, confirm the appropriate CARB contact information, and establish a timely review and payment process.
The Initial Regulation represents the first phase of CARB’s implementation. Subsequent rulemaking is expected to address requirements for 2027 and later years, including more detailed reporting provisions, Scope 3 emissions disclosures, and independent third-party assurance. Companies should therefore treat the 2026 filing as the starting point for a durable compliance program. Data governance, organizational boundaries, calculation methodologies, internal controls, documentation, and assurance readiness will need to mature as CARB’s requirements evolve.
SB 261 should remain part of the same governance discussion. The law generally requires covered entities to publish biennial climate-related financial risk reports describing material risks and measures adopted to reduce and adapt to them. However, in Chamber of Commerce v. Sanchez, the U.S. Court of Appeals for the Ninth Circuit enjoined enforcement of SB 261 while the business groups’ appeal proceeds; the appeal remains pending. The injunction does not invalidate SB 261, but CARB has confirmed that it will not enforce the January 1, 2026 reporting deadline while the injunction remains in effect and is accepting reports only on a voluntary basis through its SB 261 public docket. Covered entities should therefore maintain a compliance-ready climate risk report and supporting documentation so they can respond efficiently if the injunction is lifted or CARB issues revised timing guidance. For companies subject to both SB 253 and SB 261, coordinated oversight remains essential to maintain consistency across emissions inventories, enterprise risk assessments, financial disclosures, sustainability reporting, and public statements.
Executive Action Agenda
- Confirm applicability for each legal entity under the SB 253 and SB 261 revenue thresholds and “doing business in California” criteria.
- Establish executive ownership and align legal, finance, sustainability, enterprise risk, internal audit, and operational stakeholders.
- Approve the filing entity, organizational boundary, prior fiscal year, calculation methodology, and submission channel.
- Finalize the 2026 Scope 1 and Scope 2 submission—or the applicable statement explaining why emissions data are not being submitted—before November 10, 2026.
- Document the information not available or not being collected as of December 5, 2024, if relying on CARB’s first-year enforcement discretion.
- Prepare to receive and pay CARB’s annual fee determination within the required 60-day period.
- Assess data, control, documentation, and assurance gaps for the more comprehensive requirements expected in 2027 and beyond.
- Monitor CARB’s corporate climate disclosure program page and the official California Code of Regulations for developments.
Positioning for Compliance
OAL’s approval resolves a key implementation question and places potentially covered companies on an immediate compliance timetable. Organizations that have not completed their applicability assessment or 2026 submission package should move quickly while maintaining a defensible record of key decisions and assumptions. Trinity Consultants can support executive teams with applicability assessments, organizational and operational boundary evaluations, Scope 1 and Scope 2 inventories, reporting documentation, data-quality reviews, assurance readiness, and coordinated SB 253 and SB 261 compliance strategies. To discuss your organization’s obligations and readiness, contact Principal Consultant Charles C. Lee, Ph.D., and/or Director, Sustainability Divya Agarwal.
