SB 253 and SB 261: Two laws, different disclosures

SB 253: What are your organization’s emissions?

SB 253, the Climate Corporate Data Accountability Act, establishes annual greenhouse gas emissions disclosure for covered U.S. business entities with total annual revenues exceeding $1 billion that do business in California. A company does not have to be headquartered in California to fall within the program’s reach.[1]

The program covers three categories of emissions:

• Scope 1: Direct emissions from sources your organization owns or controls, such as fuel burned in company equipment or vehicles.
• Scope 2: Indirect emissions associated with purchased electricity, steam, heating, and cooling.
• Scope 3: Other indirect emissions across the value chain, such as purchased goods, transportation, and business travel.

For the first reporting cycle in 2026, CARB identifies November 10, 2026 as the deadline for Scope 1 and Scope 2 reporting. CARB is developing a subsequent regulation for 2027 and later reporting requirements.[1]

First-year enforcement discretion matters. CARB’s September 2026 guidance allows reporting based on information entities already had or were collecting when its December 2024 enforcement notice was issued, whether or not the data received limited assurance. Entities that were not collecting or planning to collect that data at the time are not expected to submit Scope 1 and Scope 2 data for this first cycle; CARB requests a statement of non-reporting. This is transition-year guidance, not a permanent exemption.[2]

SB 261: How could climate risk affect your business?

SB 261 addresses climate-related financial risk rather than an emissions inventory. Its statutory program covers U.S. business entities with total annual revenues exceeding $500 million that do business in California and calls for biennial climate-related financial risk reports, subject to applicable exclusions.[3]

For a multi-property organization, practical risk questions might include: How could extreme heat affect operating costs? Could flooding disrupt a facility? How might changing energy costs or policy requirements affect financial planning?

SB 261’s enforcement status is different from SB 253’s. CARB currently states that enforcement is enjoined during appellate proceedings. It will not enforce the January 1, 2026 statutory reporting deadline and encourages voluntary reporting. CARB says it will provide further information, including an alternate reporting date as appropriate, after the appeal is resolved.[3]

The takeaway: Do not treat the two laws as one deadline or one deliverable.

Why these rules matter beyond California

The most direct reason is applicability. The programs extend to qualifying U.S. businesses that do business in California—not only companies based there. Revenue thresholds are a starting point, not a complete eligibility assessment; teams should review entity structure, applicable definitions, and exclusions with counsel.[1][3]

There is also a business-readiness reason. Even an organization below the thresholds may receive emissions-data requests from customers assessing their value chains. That does not automatically create a legal filing obligation, but it can make reliable data a commercial priority.

For facilities and sustainability teams, the challenge is often less about understanding the headline than finding the underlying records. Electricity invoices sit with one team. Natural gas usage sits with another. Property-level information arrives in different formats, with missing months or inconsistent units.

A reporting deadline exposes those gaps. A repeatable data process helps address them before the next request arrives.

What organizations should do now

1. Confirm which obligations apply

Have legal, finance, and sustainability teams assess SB 253 and SB 261 separately. Document the applicability decision and monitor CARB updates. Do not assume an out-of-state headquarters excludes your company—or that SB 261’s injunction pauses SB 253.

2. Build a consistent utility-data foundation

Inventory utility accounts, meters, properties, and reporting periods. Identify who owns each data source and where records are missing. Electricity and fuel records can support important parts of Scope 1 and Scope 2 calculations, but they are not automatically a complete corporate emissions inventory.

3. Preserve the evidence behind the numbers

Keep source records, calculation methods, emission factors, organizational boundaries, and assumptions together. CARB’s 2026 guidance encourages this context where available. A total is more useful when your team can explain how it was produced.[2]

4. Connect reporting to operational decisions

Use the same data foundation to investigate unusual consumption, identify efficiency opportunities, and prioritize follow-up. Reporting and performance improvement are different tasks, but they can share reliable inputs.

Turn scattered utility data into a stronger reporting process

Verdafero helps organizations track, report, and reduce environmental impact by combining patented utility monitoring software with sustainability consulting. Its software securely monitors and analyzes utility data across properties, supporting emissions reporting and actionable insights into leaks, efficiency opportunities, and trends.

That utility-data foundation can support climate disclosure preparation. It does not replace legal applicability advice, independent assurance, a complete Scope 3 inventory, or a climate-related financial risk assessment.

The practical goal is straightforward: Make reporting easier to manage, easier to explain, and more useful for decisions.

If your organization is ready to make ESG reporting easier to manage and easier to trust, visit Verdafero’s website to learn more and schedule a demo. See how utility data can become a clearer path to faster reporting, better decisions, and measurable environmental progress.