California finalizes SB 253 climate disclosure deadline of August 2026

The California Air Resources Board approved the initial implementing regulation for climate transparency laws SB 253 and SB 261 in late February 2026, setting an August 10, 2026 deadline for large companies to disclose Scope 1 and Scope 2 emissions. As the first mandatory, industry-agnostic US climate disclosure, it raises the compliance bar for Indian firms with California operations or revenue exposure.

The California Air Resources Board (CARB) approved the initial implementing regulation for climate transparency laws SB 253 and SB 261 in late February 2026, establishing the framework for the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act. The regulation confirmed administrative fee structures and tied definitions of "doing business in California" and "revenue" to the California Revenue and Taxation Code. Covered entities with annual revenues exceeding $1 billion must disclose Scope 1 and Scope 2 greenhouse-gas emissions by August 10, 2026, for the preceding fiscal year, with enforcement discretion for good-faith first-year submissions.

SB 253 directly affects companies doing business in California with annual revenues over $1 billion, while SB 261 targets entities with over $500 million in revenue to disclose climate-related financial risks. Enforcement of SB 261 remains paused due to a federal injunction pending appeal in the Ninth Circuit, though over 120 companies have already submitted voluntary risk reports. CARB introduced a flat-rate annual fee for cost recovery and directed staff to collaborate with the California Department of Insurance to ensure reporting consistency for the insurance sector.

Covered entities face the firm August 10, 2026 deadline for Scope 1 and Scope 2 disclosure and should immediately invest in high-fidelity data collection and internal controls to avoid non-compliance penalties of $500,000 per year. Companies should verify inventories against the Greenhouse Gas Protocol and use CARB's optional reporting templates to demonstrate readiness. Scope 3 value-chain emissions reporting is not required until 2027. Indian firms with California revenue exposure should treat this as a transition from voluntary ESG storytelling to regulated financial reporting discipline.

Key figure — Reporting deadline: Scope 1 and Scope 2 emissions due by August 10, 2026 for entities above $1 billion revenue