This act provides more flexibility to companies in certain areas like not requiring a filing fee at the time of submission (the timing can be determined separately) and allowing parent-level consolidation of GHG emissions reporting so subsidiaries do not need separate filings.
This document offers a high-level comparison of the CA climate rules to other climate reporting regulations and voluntary frameworks to show high-level alignments and differences.
*CARB (California Air Resources Board) is California’s lead agency for climate change programs, overseeing all air pollution control efforts in California and catalyzing progress on greenhouse gas reduction and clean transportation.
Overview and Comparisons
SB 253 Climate Corporate Data Accountability Act
This rule requires entities to publicly disclose their independently assured Scope 1, 2 and 3 greenhouse gas emissions. Disclosure should be easily understandable while considering structural changes within the entity (M&As, divestments, etc.).
Timeline
- Scope 1 and Scope 2 GHG emissions disclosures due June 30, 2026 and annually thereafter
- Scope 3 GHG emissions disclosures starting January 2027 and annually thereafter.
SB 261 Greenhouse Gases: Climate-related Financial Risk
This rule requires entities to publicly disclose climate-related financial risk reports that also include information on measures companies have adopted to reduce and adapt to these risks.
Timeline
- Climate-related financial risk report is required to be produced and published on the entity’s website starting on or before January 1, 2026, and biennially thereafter. According to CARB’s July 2025 FAQ, “it is reasonable to expect that initial climate-related financial risk reports submitted by January 1, 2026, may cover fiscal years (FY) 2023/2024 or FY 2024/2025 depending on the organization.”
- CARB will post a public docket for covered entities to post the public link to their first climate-related financial risk report. This docket will remain open from December 1, 2025 to July 1, 2026.
Next Steps
Based on information shared during its August 21, 2025 public workshop, CARB stated that it will be:
- Posting in September for public comment a list of entities it believes are subject to SB 253 and SB 261.
- Releasing in September for public comment Scope 1 and Scope 2 emissions draft reporting templates.
- Releasing its Notice of Proposed Rulemaking and first draft of the rules in mid-October. The draft will include final proposed definitions for “doing business in California,” “revenue” and parent-subsidiary relationships, along with annual filing fee amounts and timing. Possible exempted entities to the rules may also be included.
- Holding a public comment period for the draft rulemaking until November 30, followed by Board consideration and finalization of the proposed rulemaking by December 12.
In addition, CARB stated that the deadline for SB 253 assured Scope 1 and Scope 2 emissions reporting will be June 30, 2026. As it is written into SB 261, the deadline for covered entities to post SB 261 climate risk reports remains January 1, 2026, though the public docket in which to share public links to reports will remain open until July 1, 2026.
Comparison of SB 253 and SB 261 to CSRD, IFRS S2 and GRI
| Key Elements | SB 253 (Health and Safety Code § 38532) | SB 261 (Health and Safety Code § 38533) | ESRS E1 (CSRD)1 | IFRS S2 | GRI 102: Climate Change 2025 |
|---|---|---|---|---|---|
| In-Scope Entities (US only) | Entities who do business in California (proposed CA Franchise Tax Board definition), with a total annual revenue > USD $1B | Entities who do business in California (proposed CA Franchise Tax Board definition), with a total annual revenue > USD $500M | Non-EU companies with > €450M net turnover generated in the EU Branch with €50 million net turnover Subsidiary that qualifies as a “large undertaking,” exceeds at least two of the following: (1) €25M balance sheet, (2) €50M turnover, and (3) 1,000 employees on average |
Voluntary, until mandated by a jurisdiction Over 35 jurisdictions currently adopting plus additional countryspecific requirements: Canada, Australia, Japan, Brazil, etc. |
Voluntary, universally applicable to all organizations Must transition to new GRI climate and energy topic standards after Jan 1, 2027 |
| Reporting Requirements (Climate-focused) | By June 30, 2026: Scope 1 and 2 GHG emissions from prior fiscal year and in conformance with the GHG Protocol Starting in 2027: Scope 3 GHG emissions from prior fiscal year in accordance with the GHG Protocol |
By Jan 1, 2026, and biennially thereafter: Climate-related financial risks2 and mitigation and adaptation measures report in conformance with TCFD or IFRS S2 Scope 1 and Scope 2 emissions and quantitative scenario analysis not required for first report. |
Starting in 2028 (FY27 data): Public disclosures of Scope 1, 2, 3 GHG emissions and emissions intensity Climate-related governance; policies; impacts, risks and opportunities, including current and anticipated financial effects; metrics and targets |
Scope 1, 2, 3 emissions based on GHG Protocol Climate-related governance; physical and transition risks, opportunities, and their effects on financial performance; metrics and targets Align climate data with fiscal year data |
Scope 1, 2, 3 emissions based on GHG Protocol GHG emissions intensity Just transition; transition and adaptation plans GHG emissions reduction targets and progress GHG removals along the value chain Carbon credits |
| Reporting Location | Publicly accessible digital platform, created by the state or other organization contracted by the state | Climate-related financial risk report must be made available on the entity’s website with public link added to CARB public docket | Requires integrated reporting – sustainability disclosures following the ESRS are to be combined with financial disclosures in a single report. | Requires disclosures as part of an entity’s general purpose financial reports In US, disclosures in sustainability report, climate report and/or website |
Usually present in a company’s sustainability report, climate report and/or website |
| Assurance/ Verification Level | Limited assurance for Scope 1 and Scope 2 emissions beginning in 2026, and reasonable assurance beginning in 2030. Limited assurance for Scope 3 emissions beginning in 2030. |
A description of GHG emissions and voluntary mitigation of GHG emissions in the report needs to be verified by third-party | Requires limited assurance done by independent thirdparty verifier for all reporting | Not required in the US, might be required under other jurisdictions | Not required, external assurance encouraged |
| Penalty | CARB will be looking for “good faith efforts” Administrative penalties < USD $500,000 per reporting year, resulting from nonfiling, late filing or other violations. |
CARB will be looking for “good faith efforts” Administrative penalties < USD $50,000 per reporting year, resulting from a failure to prepare and publish the report on the entity’s website. |
Based on EU member state, but could include hefty fines, public denunciation or jail time | N/A | N/A |
- ESRS E1 is currently being refined by EFRAG and therefore subject to change as part of the EU’s Omnibus package. As a result, this information could change.
- Material risk of harm to immediate and long-term financial outcomes due to physical and transition risks, including, but not limited to, risks to corporate operations, provision of goods and services, supply chains, employee health and safety, capital and financial investments, institutional investments, financial standing of loan recipients and borrowers, shareholder value, consumer demand, and financial markets and economic health.
AB 1305 Voluntary Carbon Markets Disclosures
This rule aims to create greater transparency in the sale, purchase and use of voluntary carbon offsets (VCOs). It lists requirements for three groups of entities to disclose information related to the purchasing, marketing or selling of VCOs in the state of California.
Timeline and Oversight
- First disclosure was due on January 1, 2025. Disclosures should be updated annually thereafter.
- Unlike SB 253 and SB 261, AB 1305 is not overseen by CARB. AB 1305 falls under the enforcement authority of the California Attorney General and other legal entities like district attorneys, county counsels, or city attorneys.
| Key Elements | AB 1305 | ESRS E1 (CSRD) | IFRS S2 | GRI 102: Climate Change 2025 |
|---|---|---|---|---|
| In-Scope Entities (US only) |
Entities who:
|
Non-EU companies with > €450M net turnover generated in the EU Branch with €50 million net turnover Subsidiary that qualifies as a “large undertaking,” exceeds at least two of the following: (1) €25M balance sheet, (2) €50M turnover, and (3) 1,000 employees on average |
Voluntary, until mandated by a jurisdiction Remains voluntary in US |
Voluntary, universally applicable to all organizations |
| Reporting Requirements (Climate-focused) |
|
GHG removals from projects within an entity’s own value chain GHG mitigation projects outside the entity’s value chain, financed through carbon credits |
Disclose the entity’s planned use of carbon credits to offset GHG emissions to achieve any net GHG emissions target, type of project (carbon reduction or removal) | Disclosure of total amount of carbon credits cancelled and a breakdown of removal or reduction projects For each project, report details such as project name, ID, type, and impacts on people and environment |
| Reporting Location | Relevant disclosures to be published on the entity’s website | Requires integrated reporting – sustainability disclosures following the ESRS are to be combined with financial disclosures in a single report | Requires disclosures as part of an entity’s general purpose financial reports In US, disclosures in sustainability report, climate report and/or website |
Usually present in a company's sustainability report or website |
| Assurance/ Verification Level | Independent third-party verification of company data and claims, if available | Requires limited assurance for all reporting, reasonable assurance from October 2028 Third-party independent verification |
Not required in the US, might be required under other jurisdictions | Not required, external assurance encouraged |
| Penalty | A civil penalty not exceeding USD $2,500 per day for each day that information is unavailable or inaccurate on the website For each violation, the civil penalty will not exceed USD $500,000 |
Based on EU member state, but could include hefty fines, public denunciation or jail time | N/A | N/A |
Note: Carbon Credits vs Carbon Offsets – https://carboncredits.com/carbon-credits-vs-carbon-offsets-whats-the-difference/