In our recent webinar, “California Climate Accountability: Key Takeaways and What You Need to Know,” thinkParallax partnered with law firm Ropes & Gray to break down the requirements, implications, and what companies can do today to prepare.
Whether you’re in legal, finance, sustainability, or strategy, if you do business in California, these laws are set to impact how your company operates.
If you didn't get to watch the webinar (or just want a recap), we’ve broken down the key topics that were covered below. You can also watch the full recording here.
1. SB 253 vs. SB 261: Two Laws, Two Thresholds
SB 253 (Climate Corporate Data Accountability Act) applies to companies with over $1 billion in annual revenue and requires disclosure of Scope 1, 2, and 3 greenhouse gas emissions.
SB 261 (Climate-Related Financial Risk Disclosure Act) applies to companies with over $500 million in annual revenue and requires disclosure of climate-related financial risks, with a structure based on the TCFD framework.
2. Deadlines Are Coming — Don’t Wait
While implementation details are still being finalized through litigation and rulemaking, the first reporting deadlines fall in 2026. Companies should start preparing now to avoid legal and reputational risk.
“The prudent thing to do is to start preparing as if deadlines will apply… because otherwise you risk being caught flat-footed in a few months when California Air Resources Board (CARB) does propose rules, or as it issues additional guidance.”
— Mark Rotter, Counsel, Ropes & Gray LLP
“The way the statutes are set up, they’re not optional — this is not a ‘pay a fine and skip it’ situation.”
— Michael Littenberg, Partner, Ropes & Gray LLP
3. TCFD = Your Roadmap for SB 261
The Task Force on Climate-related Financial Disclosures (TCFD) framework is the go-to structure for complying with SB 261. Its four pillars — Governance, Strategy, Risk Management, and Metrics & Targets — help companies assess and communicate climate-related risks and opportunities.
Read more about the California Air Resource Board (CARB) latest announcement on climate disclosures.
4. Scope 3 Is the Heavy Lift
SB 253’s Scope 3 reporting — emissions from across the value chain — is often the most complex. For companies just getting started, the focus should be on setting up credible systems. For those further along, refining data quality will be key.
5. Collaboration Is Essential
Climate disclosure requires cross-functional coordination. Legal, finance, sustainability, and operations all play a role — and no one team can manage the effort alone. Getting started early and involving the right people is key to ensuring compliance and building long-term resilience.
Equally important is getting executive leadership in the room. Their involvement helps ensure that climate risks and opportunities are evaluated in the context of business strategy, financial planning, and long-term growth.
“Leadership's participation in the climate risk assessment exercises is critical, because they bring a wide view of the operating context and a deep understanding of the company's strategy and budget context.”
— Sheila Ongie, Head of Sustainability Strategy, thinkPARALLAX
Big Picture: Climate Risk Is Now a Business Imperative
While California’s legislation is the first of its kind in the U.S., it’s part of a broader global trend toward increased climate transparency. Around the world, regulators, investors, and other stakeholders are calling for more credible and consistent climate risk disclosures.
Whether or not more U.S. states follow California’s lead, the bigger picture suggests that climate risk and opportunity are increasingly material to business performance and stakeholders expect companies to act accordingly.
Watch the full recording here.
Need help getting ready? Contact us for guidance on climate disclosure strategy, cross-functional planning, and reporting frameworks.
