On November 18, 2025, the California Air Resources Board (CARB) convened its third virtual public workshop to discuss implementation of California’s climate disclosure laws, including greenhouse gas (GHG) emissions reporting under Senate Bill 253 (SB 253) and climate-related financial risk reporting under Senate Bill 261 (SB 261). CARB’s remarks and stakeholder Q&A focused on near-term compliance expectations, proposed definitions, potential exemptions, fee administration, and the sequencing of rulemaking in 2026, among other things.
Key takeaways from the workshop are outlined below.
SB 253: First-Year Reporting and Administration
First-Year Scope 1 and Scope 2 Reporting Deadline
CARB indicated it is currently proposing an August 10, 2026, deadline for initial Scope 1 and Scope 2 emissions reporting. To align reported data with fiscal year realities, CARB outlined a bifurcated approach to reporting:
- If an entity’s fiscal year ends between January 1 and February 1, 2026, the entity would report data from the fiscal year ending in 2026.
- If an entity’s fiscal year ends between February 2 and December 31, 2026, the entity would report data from the fiscal year ending in 2025.
Enforcement Notice Carve-Out for Non-Collecting Entities
CARB indicated that entities that were not collecting GHG data or planning to collect such data at the time of CARB’s December 24, 2024, Enforcement Notice will not be expected to submit Scope 1 and Scope 2 data in 2026. Those entities should submit a statement on company letterhead explaining that no report was submitted because, consistent with the Enforcement Notice, the company was not collecting or planning to collect the data when the Notice was issued.
Reporting Template
CARB reiterated that use of its previously released Scope 1–2 reporting template is not required for 2026 submissions. Entities that prepare their own annual reports containing Scope 1 and Scope 2 emissions may submit those reports to CARB to satisfy the 2026 filing requirement.
Limited assurance for 2026
Limited assurance will not be required for the 2026 Scope 1 and Scope 2 submissions. CARB recommended that entities that already obtain limited assurance provide it, but assurance will be addressed in subsequent rulemaking for future years.
Scope and Applicability: Proposed Definitions and Exemptions
Revenue definition
CARB is currently proposing to use the definition of “revenue” found in the California Revenue and Taxation Code (RTC) § 25120(f)(2).
Under this approach, revenue would be determined based on “the gross amounts realized (the sum of money and the fair market value of other property or services received) on the sale or exchange of property, the performance of services, or the use of property or capital (including rents, royalties, interest, and dividends) in a transaction that produces business income, in which the income, gain, or loss is recognized (or would be recognized if the transaction were in the United States) under the Internal Revenue Code (IRC), as applicable for purposes of this part. Amounts realized on the sale or exchange of property shall not be reduced by the costs of goods sold or the basis of property sold.”
CARB noted that gross receipts can be verified against Franchise Tax Board filings.
CARB also indicated that applicability would be determined by the lesser of the entity’s two previous fiscal years of revenue to account for year-over-year changes.
Doing Business in California
CARB is currently proposing to use the definition of “doing business in California” found in RTC § 23101, but excluding § 23101(b)(3-4) relating to property holdings and payroll.
In general, an entity will be “doing business in California” if it is actively engaging in transactions for financial or pecuniary gain or profit, and any of the following conditions is met during any part of the reporting year:
- The entity is organized or commercially domiciled in the state.
- Sales, as defined in RTC subdivision (e) or (f) of § 25120 as applicable for the reporting year, of the entity in California exceed the inflation adjusted thresholds of $735,019 (2024). For purposes of this paragraph, sales of the entity include sales by an agent or independent contractor of the entity, and sales in California shall be determined using the rules for assigning sales under RTC §§ 25135 and 25136, and the regulations thereunder, as modified by regulations under § 25137.
Proposed exemptions and statutory exclusions
Based on stakeholder feedback, CARB staff is proposing exemptions for (i) nonprofit or charitable organizations that are tax-exempt under the IRC and (ii) entities whose only California business presence consists of teleworking employees.
Statutorily excluded entities include federal, state, and local government entities and majority government-owned companies, as well as entities regulated by the California Department of Insurance or engaged in the business of insurance in any state.
SB 261: Climate-Related Financial Risk Disclosure
For entities in the early stages of evaluating climate-related financial risks, CARB reinforced its prior guidance that first-year reports may focus on how climate risks relate or may be relevant to the entity, even if no material risks have yet been identified and no actions taken. Entities may also describe gaps, limitations, and assumptions underlying their climate risk assessment processes, providing transparency on methodology and maturity.
Fees and covered entities
CARB continues to contemplate a flat annual administrative fee for each climate program (SB 253 and SB 261), with fee invoices to be issued based on the number of entities required to report in 2026. Each covered subsidiary will be assessed its own fee, although a parent company may remit fees for covered subsidiaries in a single combined payment.
CARB reminded stakeholders that its preliminary list of potentially in-scope entities is not determinative, noting that it has been made aware that the list contains omissions, duplications, and other errors.
Updated Resources
Prior to the workshop, CARB posted updated FAQs on California climate disclosure requirements (as of November 17, 2025) and an updated Climate Related Financial Risk Report Checklist (also as of November 17, 2025).
Rulemaking Timeline and Next Steps
Initial Rulemaking (Q1 2026)
CARB plans initial rulemaking in the first quarter of 2026 to establish (1) the first-year-only reporting deadline for SB 253 and (2) administrative fee calculation, collection, and penalties applicable to SB 253 and SB 261.
Subsequent rulemaking for SB 253
CARB anticipates subsequent rulemaking to address additional program requirements, including data assurance requirements, further enforcement provisions, recurring reporting deadlines beyond 2026, and standardized reporting templates.