Californian Emissions-Reporting Delay Rejected

California’s greenhouse gas emissions reporting requirements will move forward as intended after a proposal to delay the new laws has failed.

New climate-related legislation, SB  253 and SB 261, was signed into law last year by Californian legislators and requires companies operating in California to report on both greenhouse gas emissions and climate-related risks, with the initial disclosures due in 2026. Due to the wide scope of the legislation, the new laws are estimated to impact approximately 75% of Fortune 1000 companies.

SB 253 will require public and private companies with revenue exceeding $1bn that do business in California to disclose Scope 1, 2 & (from 2027) 3 emissions, exceeding the regulation proposed by the SEC which would only mandate Scope 1 and 2 emissions disclosures.

The Governor’s Department of Finance proposed a budget-related bill including language which would have delayed the implementation by two years and reduced the scope. However, the version of the budget-related bill that passed did not include the two-year reporting delay, although does extend the deadline for regulators to create emissions disclosure rules to 2025.

Companies operating in California will need to publicly disclose their Scope 1 and 2 GHG emissions in line with the Greenhouse Gas Protocol from 2026, with Scope 3 disclosures being required by 2027. SB 261 will further require all companies operating in California with revenue exceeding $500m to publish a climate-related financial risk report on or before January 1st 2026. There remain ongoing lawsuits alleging that SB 253 and SB 261 violate constitutional rights.

If you would like to discuss how we can help you with climate-related financial risk reporting, do get in touch.