The California Air Resources Board (CARB) announced that it must delay its rulemaking timeline for the Climate Corporate Data Accountability Act (CA SB 253)  and the Climate-Related Risk Disclosure Act (CA SB 261). As ISPA previously reported, both laws were enacted in October 2023.  

  • SB 253 requires companies with revenues that exceed $1 billion and do business in California to report their Scope 1 and 2 emissions beginning June 30, 2026, and Scope 3 emissions beginning in 2027.  
  • SB 261 requires companies doing business in California with revenues that exceed $500 million to submit biennial public climate-related financial risk reports to the state beginning January 1, 2026.  

CARB was slated to release draft regulations on October 14th, but this action has been delayed until the first quarter of 2026 due to the large volume of public comments received. Despite the delay, CARB did not disclose any changes to the reporting deadlines for either climate disclosure law. The regulations are expected to address critical questions, including defining what it means to “do business in California” and provide further instructions for the calculation and reporting of Scope 1, 2, and 3 emissions. Given the further regulatory delay, there is uncertainty about whether the June 30, 2026, deadline for reporting of Scope 1 and 2 emissions will remain in place. CARB has previously stated that it will use enforcement discretion for the initial reporting cycle on the condition that companies make a “good faith effort” to comply with the law. 

Despite the delay, CARB recently published additional information in the form of a draft reporting template for Scope 1 and 2 emissions under CA SB 253. In their memo explaining the draft reporting template, CARB stated that its use is voluntary for reporting entities for the 2026 reporting cycle and that it is intended to streamline reporting, especially for companies that have not reported their GHG emissions before. CARB will provide additional guidance at a later date for future reporting cycles as part of its regulatory process. 

Also, this week, ExxonMobil filed a lawsuit against California over both state laws. The company asserts the laws compel it to adopt California’s viewpoint on climate change and “stigmatize” large corporations, violating its First Amendment rights. They also argue that the laws improperly force it to report on its global operations, not just those within California. Lastly, they argue that SB 261 is preempted by the federal National Securities Markets Improvement Act, which prevents states from imposing investor-reporting requirements that go beyond federal rules; specifically, that reporting on potential future financial risks is speculative and goes beyond what is required by existing federal disclosures.