Regulatory Framework · California
California SB 253 & SB 261, explained
California's climate-disclosure laws require large companies doing business in the state to disclose greenhouse-gas emissions (SB 253) and climate-related financial risk (SB 261). Here is who they cover, how they reach suppliers, and how to prepare an emissions disclosure.
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Summary for orientation only. Thresholds and dates are administered by the California Air Resources Board (CARB) and may change — this is not legal advice.
- SB 253 requires large companies doing business in California to disclose GHG emissions (Scope 1 and 2, later Scope 3).
- SB 261 requires a climate-related financial risk report, along TCFD / IFRS S2 lines.
- They reach companies anywhere that do enough business in California — headquarters location does not exempt you.
- Most SMEs meet these laws indirectly: an in-scope customer needs Scope 3 data and asks suppliers for their emissions.
- A standards-based ESG Passport with your Scope 1 and Scope 2 answers that request in minutes.
What is California SB 253?
SB 253, the Climate Corporate Data Accountability Act, is a California law requiring large companies that do business in the state to publicly disclose their greenhouse-gas emissions. It covers Scope 1 (direct emissions) and Scope 2 (purchased energy) first, with Scope 3 (value-chain emissions) phased in afterwards. The California Air Resources Board (CARB) is responsible for the detailed rules and the reporting schedule.
Because the trigger is “doing business in California” rather than being headquartered there, the law reaches a large number of national and international companies — and, through Scope 3, their suppliers.
What is California SB 261?
SB 261, the Climate-Related Financial Risk Act, is the companion law. Instead of an emissions inventory, it asks in-scope companies to publish a report describing the climate-related financial risks they face and the measures they are taking to reduce and adapt to those risks, following a recognised framework such as the TCFD recommendations (now carried forward through IFRS S2). Its revenue threshold is lower than SB 253's, so it captures a broader set of companies.
Who has to comply — and who just gets asked
There are two very different positions to be in:
Directly in scope
Large companies doing business in California
Above the revenue thresholds, a company files its own disclosures with CARB — emissions under SB 253, a climate financial-risk report under SB 261. Confirm the exact thresholds and dates against CARB's official pages.
Indirectly affected
Suppliers, including SMEs
You are unlikely to file anything with California yourself, but an in-scope customer needs Scope 3 data and will ask you for your Scope 1 and Scope 2 emissions. Answering well protects the commercial relationship.
How SB 253 reaches SMEs through Scope 3
Scope 3 is the emissions a company causes across its value chain — including the goods and services it buys (see our Scope 3 guide for what that means and what a proportionate answer looks like). When a large customer has to report Scope 3, the only way to get that number is to ask suppliers. That is why an SME with no California presence can still receive an “SB 253 questionnaire”: the customer is assembling its own value-chain figure and your emissions are one input.
You do not need to reproduce the customer's obligation. What helps them most is a clean, standards-based statement of your Scope 1 and Scope 2 emissions — exactly what an ESG Passport provides. If a request goes further than that, see our guide on answering a supplier ESG questionnaire and on the proportionate scope of buyer requests.
Go deeper on SB 253
SB 253 for suppliers
A customer told you they're covered by SB 253. The four-step way to answer their Scope 1 and Scope 2 request, and what you can decline.
The November 2026 deadline reset
CARB pushed the first reporting deadline to November 10, 2026, and SB 261 has been enjoined since late 2025. The current status, verified.
SB 253 vs. IFRS S2
A data-point mapping table between the two frameworks — where they overlap, where they diverge, and how one dataset answers both.
Who is actually covered
The revenue threshold and the separate doing-business-in-California test, with worked examples of where companies typically land.
How to prepare with EcoDiligence
Scope 1 & Scope 2 in minutes
Enter your fuel and electricity use; EcoDiligence calculates Scope 1 and Scope 2 (location-based) with the correct United States grid factor.
Sourced and transparent
Every emission factor names its source and vintage in the PDF — see the Methodology page for the full US factor table.
One answer, reused everywhere
A shareable Passport, a branded PDF, and machine-readable exports — hand the same link to every customer that asks.
Structured exports
Buyers who need structure receive the VSME Digital Template (Excel), which EFRAG's official converter turns into XBRL, from the same source of truth.
Create your free Passport, or read the Methodology to see exactly how the US emission factors are applied. Comparing that to hiring a consultant? See what an ESG report typically costs.
Frequently asked questions
This page summarises California SB 253 and SB 261 for orientation only. It is not legal advice. Revenue thresholds, definitions, and reporting dates are set in statute and refined by CARB rulemaking, and have been amended over time; always confirm the current requirements with the California Air Resources Board before acting. EcoDiligence ESG Passports are self-reported summaries structured for ESG disclosure workflows, built on the EFRAG VSME Basic Module with optional IFRS S2 climate inputs. Content is not independently assured and does not constitute compliance, certification or an audit.
Answer a California Scope 3 request the smart way
Generate a shareable ESG Passport with your Scope 1 and Scope 2 emissions — free, ~10 minutes.