The California Air Resources Board (CARB) has now taken a significant step toward implementing California’s climate disclosure laws, SB 253 and SB 261, by formally adopting the agency’s first set of implementing regulations.
While these regulations resolve several open questions, they also confirm that key aspects of both statutes (particularly Scope 3 greenhouse gas emission reporting and assurance requirements) remain to be addressed in future CARB rulemakings. Meanwhile, litigation continues to cloud the outlook for SB 261.
Importantly, CARB’s March 2026 public workshop provided additional insight into how the agency intends to operationalize these laws by offering early signals on reporting expectations, Scope 3 implementation, and overall program design.
This article summarizes CARB’s key implementation activities and what businesses should be doing to plan for compliance.
Key Climate Disclosure Developments
CARB Adopted Initial Implementing Regulations
In late February 2026, CARB approved its first regulations implementing SB 253 and SB 261. These regulations focus on foundational issues, including applicability, fees, and initial reporting timelines.
August 10, 2026 Is the First SB 253 Reporting Deadline
CARB confirmed that the first greenhouse gas emissions reports, which apply to Scope 1 and Scope 2 emissions, must be submitted by August 10, 2026. Scope 3 emissions disclosures are not required until 2027.
At its March 2026 workshop, CARB also clarified how companies should determine the applicable reporting year:
- Companies with fiscal years ending on or before February 1, 2026 will report FY 2025–2026 data
- Companies with fiscal years ending after February 1, 2026 will report FY 2024–2025 data
CARB further indicated that, for the 2026 reporting cycle, it will not impose a standardized reporting template, nor will limited assurance be required.
SB 261 Enforcement Remains Stayed
SB 261 remains subject to a Ninth Circuit injunction, and CARB has stated that it will not enforce the statute while that injunction remains in place. As a result, the statute’s original January 1, 2026 reporting deadline is no longer operative. As of CARB’s March 2026 workshop, the agency has provided no additional guidance on SB 261 and appears to be deferring further implementation pending resolution of the ongoing Ninth Circuit appeal.
CARB Established a Fee Program
The regulations include a flat-rate fee structure to fund CARB’s administration of both programs. Covered entities should expect additional guidance regarding fee collection in advance of the 2026 reporting cycle, and CARB indicates fees will be assessed in September 2026.
CARB Clarified Key Applicability Concepts
CARB’s regulations adopted the agency’s previous proposal to apply existing California statutory definitions to key terms that the legislature left undefined in SB 253 and 261, which clarify what entities are covered by SB 253 and 261:
- “Doing business in California,” means 1) actively engaging in any transaction for the purpose of financial or pecuniary gain or profit; and 2) the entity is organized or commercially domiciled in California or has sales in California that exceed $757,070 (2025) or 25 percent of the taxpayer's total sales (See, California Revenue and Taxation Code subsections 23101(b)(1) or 23101(b)(2)).
- “Revenue,” shares the same meaning as “gross receipts” as defined in section 25120(f)(2) of the California Revenue and Taxation Code and is determined by taking the lesser of the entity’s two previous fiscal years of “revenue.”
- “Parent” and “subsidiary” use the same definitions these terms have under CARB’s existing Cap-and-Invest Program (Title 17, California Code of Regulations § 95833).
While helpful, these definitions are unlikely to resolve all applicability questions, particularly for complex corporate structures. (See our previous blog post for more information on CARB’s definitions of these and other key terms.)
Additional Rulemaking Is Forthcoming
CARB made clear that this rulemaking is only an initial step. Additional rulemaking is expected later in 2026 to address:
- Scope 3 reporting requirements
- Assurance obligations
- Ongoing reporting mechanics
The March 2026 workshop confirms that CARB is actively developing a more detailed reporting framework, including standardized approaches to emissions accounting, organizational boundaries, and emissions factor selection.
What Companies Should Do Next
Prepare to Comply with SB 253 by August 10, 2026
With a confirmed August 2026 deadline, companies subject to SB 253 should be actively preparing to:
- Inventory Scope 1 and Scope 2 emissions
- Establish internal reporting controls
- Begin evaluating data systems and documentation processes
Notably, CARB’s March workshop suggests that 2026 will function as a transitional reporting year, with more prescriptive requirements, such as standardized templates and assurance, coming into effect beginning in 2027.
Stay Informed About Potential SB 261 Compliance Requirements
Even though SB 261 is currently stayed by the Ninth Circuit, companies should not assume it will be permanently invalidated. (See our previous blog post discussing the SB 261 litigation and enforcement stay.) If the injunction is lifted, CARB may move quickly to establish a new compliance timeline. Accordingly, many companies have already begun preparing climate risk disclosures consistent with the statute.
Consider Submitting Comments on Evolving Compliance Obligations
Perhaps most importantly, the current regulations leave several critical questions unanswered, particularly with respect to Scope 3 emissions and assurance. CARB’s March workshop highlights that the agency is still evaluating multiple approaches to Scope 3 reporting, including:
- Broad applicability across all categories beginning in 2027
- Sector-based phase-in (focusing on high-emitting industries)
- Category-based phase-in (starting with the most commonly reported emissions categories, such as business travel or employee commuting)
CARB is also considering allowing companies flexibility in how emissions are calculated (e.g., spend-based, activity-based, supplier-specific methods, or a hybrid thereof), and incorporating reporting elements from other jurisdictions’ emissions reporting programs, signaling a pragmatic approach to early implementation.
Companies should expect continued regulatory development throughout 2026 and plan for evolving compliance obligations. Further, companies can and should continue shaping SB 253 regulations by providing public comments and participating in future CARB workshops.
Subscribe to CARB’s listserv for up-to-date information
Now that CARB is increasing the pace of its climate disclosure rulemaking, companies should remain vigilant and subscribe to CARB’s dedicated SB 253/261 listserv for further information on topics such as:
- CARB’s continued rulemaking on Scope 3 reporting frameworks and phase-in approaches
- Development of standardized reporting templates for 2027 and beyond
- Guidance on reporting intake processes and potential extensions for 2026 filings
- The Ninth Circuit’s decision on SB 261
- CARB’s next rulemaking addressing assurance requirements (expected to begin in 2027 for Scope 1 and 2)
- Further clarification of applicability thresholds
- Fee implementation and enforcement posture
Companies should also consider subscribing to our From the Ground Up blog for the latest updates and developments regarding California’s climate disclosure laws.
Bottom Line
CARB’s adoption of initial regulations marks a turning point: SB 253 is now operational, with a fixed compliance timeline, while SB 261 remains in legal limbo.
At the same time, CARB’s March 2026 workshop makes clear that the agency is rapidly building out the program’s substantive requirements. While 2026 reporting will be relatively flexible, 2027 is likely to mark the transition to a more structured and comprehensive disclosure regime, particularly for Scope 3 emissions and assurance.
For most large companies doing business in California, the focus should now shift from monitoring developments to actively preparing for 2026 reporting even as the regulatory framework continues to evolve.
This article is part of our ongoing coverage of California’s SB 253 and SB 261.
This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.
