# California SB 253 vs SB 261: who must report, what, and when

Canonical: https://finbryn.com/us/guides/california-sb-253-vs-sb-261-who-must-report

Finbryn provides Scope 1 and Scope 2 emissions inventory preparation for companies subject to California's climate laws. SB 253 covers entities above $1 billion in revenue and its first report is due November 10, 2026; SB 261 covers entities above $500 million and is enjoined by the Ninth Circuit, with CARB not enforcing its January 1, 2026 date (checked 2026-10-16).

## Key takeaways

- SB 253 (Health and Safety Code section 38532) covers business entities above $1 billion in revenue that do business in California, and SB 261 (section 38533) covers those above $500 million. Revenue is the lesser of the two previous fiscal years, measured as gross receipts, entity by entity (17 CCR 96072).

- SB 253's first Scope 1 and Scope 2 report is due on or before November 10, 2026 (17 CCR 96076). CARB's regulation took effect October 12, 2026. Scope 3 is not required for 2026 and starts in 2027 on a schedule CARB is still writing.

- SB 261's climate-related financial risk report is on hold. The Ninth Circuit enjoined enforcement on November 18, 2025, CARB said it will not enforce the January 1, 2026 date, and CARB's program page lists no newer SB 261 notice as of 2026-10-16.

- Statutory penalties are capped at $500,000 per reporting year under SB 253 and $50,000 under SB 261. For the first SB 253 cycle CARB accepts data a company held or was collecting on December 5, 2024, or a letterhead statement that it held none.

- A supplier is not a reporting entity just because a customer is, but customers will ask for data. A Scope 1 and Scope 2 inventory answers most of those requests from one file.

## SB 253 and SB 261 in one table: what is the difference?

The two laws were enacted together and are often treated as one, but they ask for different things, have different thresholds and are in different states of enforcement today. This table reflects CARB's Final Regulation Order (September 2026), the two statutes and CARB's notices, as checked on 2026-10-16.

| | SB 253 | SB 261 |
| --- | --- | --- |
| Statute | Health and Safety Code section 38532 | Health and Safety Code section 38533 |
| Revenue threshold | Above $1 billion | Above $500 million |
| Applies to | Business entities that do business in California | Business entities that do business in California |
| Asks for | Annual Scope 1 and Scope 2 emissions, with Scope 3 from 2027 | A biennial report on climate-related financial risk and the measures taken to reduce and adapt to it |
| Framework | GHG Protocol | TCFD's 2017 final report, or an equivalent such as the ISSB's standards |
| Where it goes | Submitted to CARB | Posted on the company's own website |
| First date | November 10, 2026 (Scope 1 and Scope 2) | January 1, 2026 in the statute, not enforced |
| Penalty cap | $500,000 per reporting year | $50,000 per reporting year |
| Status on 2026-10-16 | Regulation in effect since October 12, 2026 | Enforcement enjoined by the Ninth Circuit pending appeal |

## Who is covered, and how is doing business in California tested?

Both laws use the same two tests, and CARB defines them in 17 CCR 96072. The first is revenue. A covered entity is a corporation, partnership, limited liability company or other business entity with total annual revenues above $1 billion (SB 253) or $500 million (SB 261), and the revenue amount is the lesser of the entity's two previous fiscal years. Revenue means gross receipts under Revenue and Taxation Code section 25120(f)(2), tested at the individual entity level, with sales between members of the same combined reporting group left out.

A short illustration shows why the lesser-of rule matters. A company with revenue of 1.2 billion dollars two years ago and 900 million dollars last year is measured at 900 million dollars. That is below the SB 253 threshold and above the SB 261 one.

The second test is doing business in California. CARB takes the definition from Revenue and Taxation Code section 23101 and counts an entity that does business and either is organized or commercially domiciled in California, or has California sales above the indexed amount (or 25% of total sales). The Franchise Tax Board lists $757,070 as the 2025 sales amount, on a page last updated November 7, 2025. Property and payroll thresholds are not part of CARB's definition.

Five groups are outside both laws under 17 CCR 96071(b): tax-exempt nonprofits, insurers, government entities and companies majority-owned by them, entities whose only California activity is interstate wholesale electricity, and entities whose only California business is employee pay, including teleworking employees. Covered entities must keep California tax records showing they meet the thresholds for five years. Whether a given entity is covered is a legal question for counsel.

## What does each law require?

**SB 253** requires a reporting entity to disclose its emissions for its prior fiscal year, in conformance with the GHG Protocol. The 2026 report covers Scope 1 (direct emissions) and Scope 2 (purchased electricity, steam, heating and cooling). Scope 3 (other indirect emissions up and down the value chain) starts in 2027 on a schedule CARB sets. Reports may be consolidated at the parent company level, and a subsidiary that qualifies as a reporting entity is then not required to file its own (17 CCR 96076(a)). For 2026, CARB offers a voluntary intake platform and accepts submissions by email to climatedisclosure@arb.ca.gov.

**SB 261** requires a covered entity to prepare a climate-related financial risk report every two years, disclosing its climate-related financial risk and the measures it has adopted to reduce and adapt to it. The report follows the 2017 final report of the Task Force on Climate-related Financial Disclosures or an equivalent requirement, and a company can satisfy the statute with a report prepared under another law or voluntary framework, including the ISSB's IFRS Sustainability Disclosure Standards. A company that cannot make every recommended disclosure provides what it can, explains the gaps and describes the steps to complete them. The report is posted on the company's website, and parent-level consolidation is allowed.

Both programs come with an annual fee that CARB sets to cover its costs. CARB's regulation has the Executive Officer send a written fee notice by December 10 each year starting in 2026, due within 60 calendar days (17 CCR 96074). The documents we read do not say how the SB 261 fee is treated while enforcement is enjoined, so that is a question for counsel or CARB.

## Dates: what is due and what is paused?

For SB 253, the path to November 10 was bumpy. CARB's Board approved the initial regulation on February 26, 2026 and submitted it to the Office of Administrative Law (OAL) on May 20, then withdrew it to make clarifying changes. A bulletin of June 24, 2026 moved the first deadline from August 10 to November 10, 2026, a 15-day notice followed on July 27, and CARB resubmitted the package on September 21. OAL approved it on October 12, 2026, the day the regulation took effect. CARB's 2026 guidance, dated September 1, 2026, covers the first report.

For SB 261, the statutory date of January 1, 2026 passed without enforcement. On November 18, 2025, the Ninth Circuit enjoined enforcement of SB 261 while the appeal in Chamber of Commerce v. Sanchez (No. 25-5327) proceeds, and it declined to enjoin SB 253. CARB's advisory of December 1, 2025 says it will not enforce the January 1, 2026 date and will give an alternate date, as appropriate, after the appeal is resolved. Argument was held on January 9, 2026. We found no merits ruling in the sources checked on 2026-10-16, and CARB's program page still lists the December 2025 advisory as its latest SB 261 notice. Before relying on any SB 261 date, check the Ninth Circuit docket and CARB's page on the day you rely on it.

Diagram: SB 253 and SB 261 key dates, December 2024 to December 2026. Eight dated steps: the 2024 enforcement notice, the SB 261 injunction and advisory, the January 2026 argument, the June 2026 deferral, the October 12 regulation and the November 10 report.

## Assurance and the Scope 3 phase-in: what is final and what is proposed?

The statute sets the long-run shape. Scope 1 and Scope 2 assurance is at a limited level starting in 2026 and a reasonable level starting in 2030. Scope 3 disclosure starts in 2027, and CARB may require limited assurance over Scope 3 from 2030. CARB's 2026 guidance, given first-year enforcement discretion, accepts submissions whether or not assurance was obtained, so CARB will accept the November 10, 2026 filing without an assurance report. That is enforcement discretion, and CARB says it is not an interpretation of the statute.

For 2027 and later, CARB is writing a second regulation. At its July 21, 2026 workshop, staff proposed requiring five Scope 3 categories from 2027: purchased goods and services, fuel and energy-related activities, waste generated in operations, business travel and employee commuting. Companies could report the other ten categories voluntarily. Staff also proposed that, for reports submitted in 2027, a company obtain limited assurance over Scope 1 and Scope 2 from an independent third party under one of five standards (AA1000AS v3, AICPA AT-C 210, ISAE 3410 with ISAE 3000 for engagements before December 15, 2026, ISSA 5000 for engagements from that date, or ISO 14064-3), and that a reasonable assurance engagement would satisfy the limited requirement.

These are staff concepts. They are not adopted, they may change, and nothing in this section is a rule until CARB publishes and adopts the second regulation.

## What are the penalties, and how does enforcement discretion work?

SB 253 penalties may not exceed $500,000 per reporting year. From 2027 through 2030, Scope 3 penalties apply only to nonfiling, and a reporting entity is not penalized for Scope 3 misstatements made with a reasonable basis and disclosed in good faith (Health and Safety Code section 38532(f)). SB 261 penalties may not exceed $50,000 per reporting year (section 38533(f)(2)). CARB's regulation lets it assess penalties consistent with the statutes and treats each calendar day of a violation as a separate offense (17 CCR 96075), which is why the statutory caps are worth knowing.

Enforcement discretion is separate from the penalty cap. CARB's Enforcement Notice of December 5, 2024 said that, for the first SB 253 report, it would not take enforcement action for incomplete reporting where an entity makes a good faith effort to comply and retains the relevant data. The regulation turned that into two options for the November 10, 2026 report only: submit emissions that can be determined from information held or being collected on or before December 5, 2024, or submit a letterhead statement that none was.

For SB 261, enforcement is enjoined, so no one is being penalized for missing the January 1, 2026 date. That could change after the appeal.

## Suppliers: what will a covered customer ask you for?

SB 253 puts duties on reporting entities. It does not make a supplier a reporting entity, and a customer's request to a supplier is a commercial request, not a legal one. Requests are still likely. CARB's staff concept for 2027 starts Scope 3 with purchased goods and services, fuel and energy-related activities, waste, business travel and employee commuting, and asks each reporting entity to disclose what percentage of a category was calculated from primary data obtained from suppliers. It also allows industry-average and spend-based estimates. A supplier that can hand over its own Scope 1 and Scope 2 totals, with a methodology note, lets the customer replace an estimate with real data.

A short list of what to have ready: a boundary statement, Scope 1 and Scope 2 totals for a named fiscal year, the emission factors and GWP values used with their editions, the method for Scope 2 (location-based and market-based where contracts exist), and a named person who can answer follow-up questions. The [GHG inventory page](/services/esg-climate-reporting-support/ghg-inventory-scope-1-2) shows a worked example. Answer each customer from the same file, so two customers never get two different figures.

## How do SB 253 and SB 261 connect to ISSB and CSRD?

CARB's July 2026 slides say SB 253 aligns with the GHG Protocol and that staff want interoperability with IFRS S2 and the EU's CSRD where possible. IFRS S2 measures greenhouse gas emissions under the same GHG Protocol Corporate Standard, so a company that reports for an ISSB-based group already has most of the data SB 253 asks for, though the boundary and the entity-level revenue tests differ. SB 261's statute names the ISSB's standards as a framework a covered entity can use for its report.

CSRD is a separate regime. It reaches a US company through its EU subsidiary or branch, on thresholds that Directive (EU) 2026/470 raised to EUR 450 million of net turnover and an average number of employees above 1,000 during the financial year, and it uses double materiality, which SB 253 does not. The [comparison of ISSB, CSRD, GRI and SB 253](/guides/esg-reporting-frameworks-compared) sets the four side by side, and the [CSRD](/services/esg-climate-reporting-support/csrd-readiness-us-groups) and [ISSB](/services/esg-climate-reporting-support/issb-ifrs-s1-s2-sasb-tcfd-reporting) service pages cover the data work.

## What should a company that may be covered do this month?

Eight steps, in an order that stops wasted work:

1. Test revenue entity by entity, using the lesser of the two previous fiscal years of gross receipts.
2. Test whether each entity does business in California under the domicile and sales tests, and note which year's indexed sales amount applies.
3. Ask counsel to confirm coverage, and whether an exclusion in 17 CCR 96071(b) applies.
4. Fix the report year using the fiscal year-end rule in 17 CCR 96076(c).
5. List what Scope 1 and Scope 2 data the company held or was collecting on December 5, 2024, because that decides which first-year option is available.
6. Decide the route: the full inventory, the December 2024 data, or the letterhead statement, and keep the records for five years.
7. Decide whether to engage an independent assurance provider now. CARB will accept the 2026 filing without assurance under its enforcement discretion, and staff have proposed limited assurance for 2027.
8. Calendar the December 10 fee notice and the 60-day payment window.

Finbryn prepares the facts for steps 1, 2 and 5, builds the inventory and the submission package for step 6, and keeps the file the assurance provider will want in step 7. It does not decide coverage, give legal advice, submit reports or provide assurance.

## How do you check the current status yourself?

These laws change by notice, not by calendar. Three places hold the primary record. CARB's program page for corporate greenhouse gas reporting and climate-related financial risk lists the regulation, guidance and each enforcement notice with its date, and CARB runs a listserv for updates. The Ninth Circuit's docket for Chamber of Commerce v. Sanchez (No. 25-5327) holds anything new on SB 261. And the California Legislative Information site carries the statutory text of Health and Safety Code sections 38532 and 38533.

CARB's helpline is (800) 242-4450 and its program email is climatedisclosure@arb.ca.gov. This guide was last reviewed on 2026-10-16; if a newer CARB notice exists, it controls.

## Frequently asked questions

**Q: What is the difference between SB 253 and SB 261?**

A: SB 253 requires annual Scope 1, Scope 2 and, from 2027, Scope 3 emissions reporting from entities above $1 billion in revenue, submitted to CARB, with a first report due November 10, 2026. SB 261 requires a biennial climate-related financial risk report, posted publicly, from entities above $500 million, and its enforcement is enjoined (checked 2026-10-16).

**Q: Is SB 261 enforceable right now?**

A: No. The Ninth Circuit enjoined enforcement on November 18, 2025 pending appeal, and CARB's advisory of December 1, 2025 says it will not enforce the January 1, 2026 date. CARB's program page lists no newer SB 261 notice as of 2026-10-16. Check the docket, No. 25-5327, before relying on this.

**Q: What are the penalties under California SB 253?**

A: Up to $500,000 per reporting year (Health and Safety Code section 38532(f)). Scope 3 penalties from 2027 through 2030 apply only to nonfiling, and good-faith Scope 3 misstatements with a reasonable basis are not penalized. SB 261 penalties are capped at $50,000 per reporting year.

**Q: How is doing business in California decided?**

A: CARB uses Revenue and Taxation Code section 23101: the entity is organized or commercially domiciled in California, or its California sales exceed the indexed amount or 25% of total sales. The Franchise Tax Board lists $757,070 for 2025. Counsel makes the determination, entity by entity.

**Q: Do I need Scope 3 emissions for the first SB 253 report?**

A: No. 17 CCR 96076(a) says Scope 3 is not required for 2026. The statute starts Scope 3 in 2027 on a schedule CARB sets, and CARB staff proposed five categories on July 21, 2026, which are concepts and not yet a rule.

**Q: Does a subsidiary file separately from its parent?**

A: Not if the parent chooses to consolidate. Under the regulation in effect since October 12, 2026, reports and fee payments may be consolidated at the parent level, and a qualifying subsidiary is then not required to file its own (17 CCR 96076(a), 96074(b)). The revenue and doing-business tests still apply to each entity.

**Q: Does SB 253 apply to a supplier that is below $1 billion?**

A: No. As of 2026-10-16, the regulation in effect since October 12, 2026 applies SB 253 to reporting entities, not to their suppliers. A supplier may still receive data requests from a covered customer, which are commercial requests. A Scope 1 and Scope 2 inventory answers most of them.

## Sources

1. [CARB, Corporate Greenhouse Gas Reporting and Climate-Related Financial Risk Disclosure program page](https://ww2.arb.ca.gov/our-work/programs/california-corporate-greenhouse-gas-reporting-and-climate-related-financial-risk) (2026-10-16)
2. [CARB, Final Regulation Order, 17 CCR 96070 to 96077 (September 2026)](https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2026/sb%20253-261/Final%20Regulation%20Order_Final.pdf) (2026-10-16)
3. [CARB, Guidance for SB 253 2026 Reporting Submittals (September 1, 2026)](https://ww2.arb.ca.gov/sites/default/files/2026-09/2026_SB253_Reporting_Guidance.pdf) (2026-10-16)
4. [CARB bulletin, regulation approval and November 10, 2026 deadline (October 12, 2026)](https://content.govdelivery.com/accounts/CARB/bulletins/42ee5c1) (2026-10-16)
5. [CARB bulletin, deferral of the 2026 deadline (June 24, 2026)](https://content.govdelivery.com/accounts/CARB/bulletins/41d8418) (2026-10-16)
6. [CARB, SB 253 Enforcement Notice (December 5, 2024)](https://ww2.arb.ca.gov/sites/default/files/2024-12/The%20Climate%20Corporate%20Data%20Accountability%20Act%20Enforcement%20Notice%20Dec%202024.pdf) (2026-10-16)
7. [CARB, SB 261 Enforcement Advisory (December 1, 2025)](https://ww2.arb.ca.gov/sites/default/files/2025-12/Dec%201%20SB%20261%20Enforcement%20Advisory.pdf) (2026-10-16)
8. [CARB, SB 253 public workshop slides (July 21, 2026)](https://ww2.arb.ca.gov/sites/default/files/2026-07/SB_253_Presentation_July_2026.pdf) (2026-10-16)
9. [California Health and Safety Code section 38532 (SB 253), leginfo](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC&sectionNum=38532) (2026-10-16)
10. [California Health and Safety Code section 38533 (SB 261), leginfo](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC&sectionNum=38533) (2026-10-16)
11. [California Franchise Tax Board, Doing business in California (updated 11/07/2025)](https://www.ftb.ca.gov/file/business/doing-business-in-california.html) (2026-10-16)
12. [CARB rulemaking page, California Corporate Greenhouse Gas Reporting and Climate-Related Financial Risk Disclosure](https://ww2.arb.ca.gov/rulemaking/2025/california-corporate-greenhouse-gas-reporting-and-climate-related-financial-risk) (2026-10-16)
13. [Ninth Circuit docket, Chamber of Commerce v. Sanchez, No. 25-5327](https://www.courtlistener.com/docket/71212215/united-states-of-america-chamber-of-commerce-et-al-v-sanchez-et-al/) (2026-10-16)

Reviewed October 2026

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