California's climate disclosure framework is entering its first full reporting phase. At its February 2026 meeting, the California Air Resources Board (CARB) formally approved the climate transparency regulation and set the first-year greenhouse gas (GHG) disclosure deadline for August 10, 2026.
Regulatory Framework
The core law, SB 253 (Climate Corporate Data Accountability Act), requires companies with more than $1 billion in annual revenue and business activity in California to disclose Scope 1-3 GHG emissions annually. SB 261, in parallel, requires companies with more than $500 million in annual revenue to submit climate-related financial risk reports every two years. These two laws were amended by SB 219 and together form the current framework. CARB published the initial proposed regulation and notice of public hearing on December 23, 2025, and formally approved the rule in February 2026.
Scope: Out-of-State and Non-U.S. Companies May Be Covered
Both programs apply to U.S. companies doing business in California, whether public or private, and are not limited to entities incorporated in California. Companies with sufficient scale and business presence in the state may be covered regardless of headquarters location, which extends the impact across supply chains.
Implications for Management and Procurement
After Scope 1 and Scope 2, Scope 3 disclosure, including supply chain emissions, comes into view from 2027. Collecting and assuring emissions data is a cross-functional issue that spans not only environmental teams but also finance and audit. Companies doing business in California and their trading partners should use the first-year deadline of August 10, 2026 as a checkpoint for readiness in calculation and disclosure.