The California Air Resources Board (CARB) officially started the formal rulemaking process for two climate reporting measures previously passed by the State Legislature and signed into law in 2023. The measures, SB 253 and SB 261, expand reporting requirements for entities doing business in California to capture emissions and climate risk data.
SB 253 requires entities doing business in California with annual revenues exceeding $1 billion to disclose the following emissions data:
· Scope 1: Direct emissions from a source a company owns or controls,
· Scope 2: Indirect emissions from the generation of purchased energy (heating, cooling, refrigeration, steam, etc.),
· Scope 3: All other indirect emissions (typically considered ‘upstream’ or ‘downstream’ emissions and result from employee travel, product transportation/disposal, and more).
Ag Council did not support the inclusion of Scope 3 in SB 253 when it was moving through the Legislature due to the challenge of accurately measuring many of these emissions.
CARB is proposing a June 30, 2026, reporting deadline for Scope 1 and 2 emissions and will begin requiring reporting of Scope 3 emissions in 2027 (exact date TBD).
SB 261, which created the Climate Related Financial Risk Disclosure Program, requires businesses in California with more than $500 million in annual revenue to biennially publish a report detailing their climate-related financial risk. CARB will accept reports that adhere to existing voluntary reporting frameworks such as the InternationalSustainability Standards Board (ISSB). The report must be featured publicly on the entity’s website, in addition to being submitted to CARB. The first reports are due on January 1, 2026.
Those required to report under SB 253 and/or SB 261 must also pay an annual flat fee for each program. While CARB has identified a proposed methodology for determining fees — the total cost of implementation divided by the total number of covered/reporting entities — the official fee schedule is unclear. Additionally, CARB has indicated that entities undertaking good faith reporting efforts in adherence with existing voluntary emissions and climate risk reporting guidelines will not face penalties for reports filed in 2026.
The formal rulemaking process begins October 14, 2025, and CARB will consider adoption of the final rule during their December board meeting.
Ag Council staff is regularly participating in CARB workshops and continues to engage on this important issue impacting our members. Ag Council will be developing comments for the upcoming formal rulemaking process.
Further details provided during CARB’s climate reporting workshop in August are available HERE.