California's climate disclosure landscape shifted dramatically this week. On Tuesday, the California Air Resources Board revealed new flexibility for SB 253 emissions reporting — extending the deadline to August 10, 2026 and eliminating first-year assurance requirements, among other changes. Then the Ninth Circuit Court of Appeals issued an injunction freezing SB 261, the law requiring climate-related financial risk disclosures that was set to take effect January 1, 2026.
For companies navigating California’s climate disclosure landscape, yesterday’s developments introduce both flexibility and uncertainty. Here's what you need to know about both developments and how they affect your strategy.
SB 253: Extended deadline, lighter first-year requirements
CARB's workshop brought several significant updates to SB 253, California's greenhouse gas emissions disclosure law.
The new proposed deadline for first-year reporting is August 10, 2026 — a two-month extension from the previously expected June 30 cutoff. Here's how it breaks down:
- If your fiscal year ends between January 1 and February 1, 2026, you'll report FY 2026 data.
- If your fiscal year ends between February 2 and December 31, 2026, you'll report FY 2025 data.
- Every company gets at least six months after fiscal year-end to prepare and submit their report.
Limited assurance will not be required for 2026 submissions. This is among the most significant developments. While SB 253's assurance requirements haven't been eliminated — they've just been delayed — this gives organizations breathing room to build verification-ready systems without the pressure of immediate third-party review. Of course, many companies will go ahead with assurance in 2026 due to requests from suppliers or because they want verified data to share with their stakeholders.
Lastly, entities that were not collecting data or were not planning to collect data, at the time the enforcement notice was issued, are not expected to submit Scope 1 and 2 reporting data in 2026. Naturally, this reflects CARB’s current enforcement posture and companies should watch for updates.
What SB 253 changes mean for your sustainability report
It's worth clarifying what SB 253 actually requires and what it doesn't. The law mandates that companies submit their emissions data to CARB. It does not require you to publish this information on your own website or in a sustainability report. That's SB 261's domain.
CARB has confirmed that companies producing annual sustainability reports that include Scope 1 and 2 emissions may submit those reports directly to CARB for 2026 compliance. So while the new August 10 deadline doesn't dictate your sustainability reporting schedule, if your report is ready by that date, you can use it to satisfy your SB 253 submission.
SB 261: Injunction freezes climate-related financial risk reporting
Just minutes into CARB's workshop, the Ninth Circuit delivered a bombshell: an injunction pending appeal of SB 261, California's climate-related financial risk disclosure law. This means the January 1, 2026 SB 261 disclosure requirement is temporarily suspended, with enforcement paused until the Ninth Circuit rules on the appeal.
The Ninth Circuit declined to enjoin SB 253, likely because its August 10, 2026 effective date falls after the court is expected to rule on the merits of the underlying appeal. According to the National Law Review, the injunction preserves the status quo until the Ninth Circuit evaluates whether California's mandatory climate disclosure regime is legally sound.
What the SB 261 injunction means for your strategy
Companies don’t need to worry about the immediate January 1, 2026, climate risk disclosure deadline. But this is a pause, not a permanent reprieve.
The injunction pending appeal means companies still face the risk of an immediate disclosure requirement following a ruling by the Ninth Circuit. The burden to prepare for the compliance obligation remains a significant concern. If the injunction lifts, it’s back to a full sprint on SB 261 — so don’t put your running shoes away.
For companies that were already preparing climate-related financial risk disclosures aligned with TCFD or IFRS S2 frameworks, this injunction doesn't change the strategic value of that work. Climate risk disclosure is increasingly expected by investors, lenders, and customers regardless of regulatory mandates. Use this time to strengthen your climate risk analysis and disclosure capabilities without the pressure of an immediate legal deadline.
Our perspective: Strategy should outlast regulatory turbulence
The last few weeks have made one thing clear: regulatory pathways — in California or the EU — are not linear. SB 253’s timeline may shift, SB 261 is paused pending appeal, and companies have been facing similar uncertainty under CSRD and ESRS, with shifting expectations and evolving timelines.
But the companies defining the next era of climate leadership aren’t calibrating their strategy to every twist in the legislative process. They’re calibrating to risk, resilience, and relevance.
Markets, investors, and customers are still moving toward greater transparency. Supply-chain questionnaires are becoming more rigorous. Capital markets increasingly expect credible climate governance and forward-looking risk planning. Whether or not a particular requirement is enforced in 2026, these expectations are already shaping competitive dynamics today.
Regulatory uncertainty may slow down those who were relying on compliance to set their pace. But for organizations that view climate disclosure as a strategic asset — a tool for strengthening resilience, sharpening decision-making, and building trust — this moment is an advantage, not a setback.
The smartest companies will use this window to:
- Elevate data quality before assurance becomes mandatory
- Pressure-test climate risk frameworks before scrutiny intensifies
- Strengthen internal governance before disclosure becomes standard
- Align narrative and strategy before markets demand more clarity.
When the legal dust settles — in California, Brussels, or elsewhere — it won’t be the companies that waited for certainty who lead. It will be the ones that treated uncertainty as a runway: to build capacity, deepen alignment, and advance resilience in ways regulation alone could never mandate.
Frequently Asked Questions
When is the new deadline for first-year SB 253 reporting?
August 10, 2026—a two-month extension from the previously expected June 30 date. The reporting year depends on your fiscal year end: if it falls between January 1 and February 1, 2026, you'll report FY 2026 data. If it falls between February 2 and December 31, 2026, you'll report FY 2025 data. Every company gets at least six months after fiscal year-end to prepare their submission.
What's the status of SB 261 climate risk reporting requirements?
The Ninth Circuit Court of Appeals has issued an injunction pending appeal, freezing the January 1, 2026 deadline for climate-related financial risk disclosures. The law remains on hold until the court rules on the merits of the underlying appeal brought by the US Chamber of Commerce and other business groups. Companies should continue preparing for potential future compliance, and still face the possibility that the disclosure obligation could be reinstated quickly following a Ninth Circuit ruling.
Is assurance required for 2026 SB 253 reporting?
No. Limited assurance will not be required for first-year 2026 submissions. However, assurance requirements will phase in for subsequent years, so use 2026 as an opportunity to build verification-ready systems.
Do we have to use CARB's reporting template?
No. The draft Scope 1-2 template is optional for 2026 reporting. If your company already produces an annual report that includes Scope 1 and 2 emissions information, you may submit that report directly to CARB for 2026 compliance.
What if we weren't collecting emissions data when CARB issued its enforcement notice in December 2024?
CARB will exercise enforcement discretion for companies actively working toward compliance. If you weren't collecting data or planning to collect data when the December 2024 notice was issued, you're not expected to submit Scope 1 and 2 data in 2026. Instead, submit a statement on company letterhead to CARB explaining that your company was not collecting data at the time the notice was issued.
Will there be fees associated with SB 253 and SB 261 compliance?
Yes. CARB is authorized to assess annual fees to cover ongoing program administration costs. Companies with $500 million to $1 billion in revenue pay only the SB 261 fee annually. Companies with over $1 billion in revenue pay both the SB 253 fee and the SB 261 fee annually. Each covered subsidiary is assessed its own fee, though parent companies may submit combined payments. Fee invoices will be issued based on the number of entities required to report, with proposed assessment beginning September 10, 2026.
Should we continue preparing for SB 261 compliance despite the injunction?
Yes. While the immediate deadline is suspended, the Ninth Circuit could rule in California's favor, reinstating the requirement quickly. More importantly, climate risk disclosure aligned with frameworks like TCFD or IFRS S2 provides strategic value regardless of regulatory mandates — building investor confidence, informing decision-making, and meeting stakeholder expectations. Use this time to strengthen your capabilities without the pressure of an immediate deadline.
