What is this regulation about?
The Climate Accountability Package (SB 219) amended the Climate Corporate Data Accountability Act, or SB 253, and the Climate-Related Financial Risk Act, or SB 261. SB 253 requires companies — both public and private — with over $1B in annual revenues operating in California to disclose their greenhouse gas (GHG) emissions. Most notably, it calls for businesses to report their Scope 3 emissions — the emissions that occur along a company’s value chain — in addition to their Scope 1 and Scope 2 emissions. It includes measures like carbon pricing, emissions reporting and penalties for non-compliance.
SB 261 requires U.S.-based companies with more than $500M in annual revenue doing business in California to report any climate-related financial risks they have identified and any measures they have adopted to reduce and adapt to those risks. In-scope businesses are required to report every two years. Organizations must base their reports on the Task Force on Climate-Related Financial Disclosures’ recommendations, and the reports must be published on the company’s website.
How does this impact my business?
Under SB 253, businesses with more than $1B in revenue that operate in California, must track and report their Scope 1 and 2 emissions. Reporting begins in 2026, using 2025 data. Disclosure of Scope 3 emissions will be required in 2027. While businesses operating in California get ready for the emissions disclosure requirements of SB 253, they should also be preparing for SB 261.
What can I do to get started?
To prepare to comply with the California Climate Accountability Package, businesses should begin gathering 2025 emissions data and conduct inventory for Scopes 1, 2 and 3. Consider reviewing your existing climate disclosures and aligning them with recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). To prepare for disclosure and get started in developing an approach to governance, strategy, risk management, and metrics and targets under the guidance of TCFD, reach out to speak with a sustainability consultant.
