On February 26, 2026, CARB approved regulations to implement California Senate Bills 253 (the Climate Corporate Data Accountability Act) and 261 (the Climate-Related Financial Risk Act) following a public hearing. The regulations provide the first comprehensive framework for administering California’s climate disclosure laws.
Importantly, although CARB has approved the regulations, enforcement of SB 261 remains on hold pending resolution of the legal challenge currently before the U.S. Court of Appeals for the Ninth Circuit. The Ninth Circuit heard oral argument on January 9, 2026, and has not yet issued a decision. As a result, SB 261’s climate-related financial risk reporting requirements are not presently enforceable, and the statutory reporting deadline of January 1, 2026, is effectively on hold while the injunction remains in place. SB 253 is not subject to the injunction currently applicable to SB 261.
Overview of the Regulations
The regulations establish key definitions, applicability standards, administrative requirements, and fee provisions for both statutes. The regulations also provide guidance on the businesses subject to the laws by explaining what is meant by “doing business in California.”
The regulations define “doing business in California” by reference to California Revenue and Taxation Code § 23101 and define “revenue” as having the same meaning as “gross receipts” under California Revenue and Taxation Code § 25120(f). Certain entities are excluded, including tax-exempt nonprofits, governmental entities, and certain insurance-regulated entities.
Reporting and Administrative Requirements
For SB 253, the regulations establish an initial reporting deadline of August 10, 2026, for Scope 1 and Scope 2 emissions for the reporting entity’s prior fiscal year. Additional provisions address record retention and administrative compliance.
The regulations also establish an annual fee structure to fund CARB’s implementation and oversight of both programs. Covered entities will receive notice of assessed fees and must submit payment within the prescribed timeframe. Entities are required to maintain records demonstrating applicability and compliance for at least five years and are subject to audit.
With respect to SB 261, the regulations outline administrative provisions and definitions that will govern once enforcement is permitted. However, given the ongoing injunction, CARB acknowledges in its February 26 press release that “[p]ursuant to Court order, CARB is not enforcing SB 261, and reporting is voluntary.”
Practical Considerations
The scope and timing of companies’ SB 261 obligations remain dependent on the Ninth Circuit’s forthcoming decision. Companies that may meet the statutory revenue thresholds should continue assessing applicability, evaluating GHG data collection and reporting systems, and preparing for SB 253 reporting obligations. Entities potentially subject to SB 261 should monitor developments closely, as the injunction could be lifted upon issuance of the Ninth Circuit’s decision.
We will continue to monitor both the litigation and CARB’s rulemaking process and provide updates as developments occur.
