At a public hearing held on February 26, 2026, the California Air Resources Board (CARB) voted to approve the adoption of initial regulations implementing the Climate Corporate Data Accountability Act (SB 253) and the Climate-Related Financial Risk Act (SB 261), substantially as proposed in December 2025. According to a press release issued by CARB, adoption of the initial regulations will enable CARB to administer and fund the statutory reporting programs under the two bills.
The regulations provides important definitions for determining which entities will be in scope of SB 253 and SB 261, including definitions for “doing business in California,” “revenue,” “parent,” and “subsidiary;” details on how program fees will be assessed and collected by CARB; and a first-year reporting deadline for SB 253 of August 10, 2026 (rejecting a proposal to instead adopt a rolling deadline). The regulations also provide a cut-off for determining the applicable reporting year, as follows:
If the reporting entity’s fiscal year ends on or before February 1 in a calendar year, the applicable preceding fiscal year shall be the fiscal year ending in the current calendar year.
- If the reporting entity’s fiscal year ends after February 1 in a calendar year, the applicable preceding fiscal year shall be the fiscal year ending in the previous calendar year. However, the reporting entity may choose to report their Scope 1 and Scope 2 emissions from their most recent preceding fiscal year notwithstanding their fiscal year ending after February 1, where that data is available.
CARB indicated that it may provide case-by-case relief in the first year where appropriate. Notably, CARB has already indicated that in-scope entities that were not collecting emissions data or were not planning to collect data, at the time the December 5, 2025, Enforcement Notice was issued, are not expected to submit Scope 1 and 2 reporting data for the first reporting cycle (2026). This approach is intended to support companies as they transition into complying with these new reporting requirements. (See Q19 of the November 17, 2025 FAQs).
CARB has also indicated that it will exercise enforcement discretion for the first report due in 2026 with respect to SB 253’s requirement to provide limited assurance, allowing reporting entities to submit Scope 1 and Scope 2 emissions for their prior fiscal year based on information they already have or were collecting when the December 2025 Enforcement Notice was issued, whether or not the data received limited assurance. (See Q20 of the November 17, 2025 FAQs).
Additional rulemaking is expected later this year, including further development of Scope 3 emissions reporting, data assurance, and reporting deadlines for 2027 and beyond.
The board also directed the CARB staff to evaluate the emissions reporting requirements of the California Department of Insurance (CDI) and propose future regulatory requirements for insurance companies (who are currently out of scope of SB 253, but not SB 261) if they are not otherwise required to submit emissions data to the CDI. At the hearing, Senator Wiener, a co-sponsor of SB 253, criticized the insurance company exclusion as inconsistent with the text of the statute.
CARB must now evaluate whether additional conforming modifications to the regulations are appropriate. If so, the modified regulatory language will be made available for public comment for at least 15 days. If not, CARB will take final action to adopt the regulations in their current form.
The California climate laws remain subject to ongoing litigation, and SB 261 specifically has been enjoined by the Ninth Circuit Court of Appeals. The injunction does not extend to SB 253.